I'd expect them to know about it. Regardless, if village dogs come to your site you're probably settling within the village's "territory", with various other negative side effects, so I'd recommend a relocation.
There are reports of villagers putting stuff in player camps that are too close and then consider it theft when the players take those items. I'm not sure, but I wouldn't be surprised if they also use your stuff (that's been reported when dropping items in villages, anyway).