The villages are all independent and each has its own secrets, hidden techniques, et cetera, which they guard from other villages. The locations of each village although not completely a secret are obscured, preventing them plans or other sensitive information from leaking out.
The villages were probably truly hidden when they were established, but over time became more well known (the are the centers of economy for each country). Villages need commissions to stay afloat. They probably can't get many commissions if they are hard to find.
Calling them "hidden" is most likely a reference to real life ninjas that lives in hidden villages, remote settlements for ninja in Japan during its Feudal period. It also gives the villages a certain mystique.