Every instance I've seen of people completing It Takes a Village..Out it has been stated that it required multiple playthroughs, and it was no different for me. I recorded three successful runs of that mission, obliterating everything in site. On the third attempt, I eliminated all but two or three buildings prior to the objective building and it popped.
It Takes A Village...Out is a cumulative achievement.
Fun Fact: In old Nordic slang, to "take an arrow to the knee" meant someone got married and in fact has nothing to do with being physically shot in the knee with an arrow.
Currently in the Borderlands, breaking the backs of mules.