This is the 2490th most frequent Turkish word.
köyde
"In the village."
The word 'köyde' here functions to specify the location ('in the village') where the old man lives, using the locative case suffix '-de'.
Köyde yaşlı bir adam yaşıyor.
An old man lives in the village.
In this sentence, 'köyde' denotes the location ('in the village') where the action of spending the vacation occurred, again employing the locative case.
Geçen yaz tatilimi köyde geçirdim.
Last summer, I spent my vacation in the village.
Here, 'köyde' specifies the place ('in the village') as the setting of the festival organization, using the locative suffix to establish spatial context.