You just have to be patient. Learn how far his fair and bair hit and put yourself right out of range, especially when edgeguarding. Bat back Lloyd's and if he catches one it makes recovering a lot easier since he can't pocket PKT1. Also, don't go offstage for edgeguards; it's a deathwish if you mess up.
You just have to keep the pressure on. Villager thrives in the mid-range/trap-setting kind of game. If you don't give them room to work they can't set anything up. If they're being aggressive make sure to powershield and punish. We have better OoS options and, aside from Villager's jab and ftilt, we are better up close. All of our usual strings still work at low %, and he has a hard time getting out of them because of his air mobility.
At high %, watch out for his utilt and all of his smashes. His uair and dair can kill if they get the 3 turnips (33% chance), and bair has higher knockback than fair, so they'll start pressuring with that if you're at kill %.
PK fire is good on a recovering Villager. When they grab the ledge the balloons get released and PK fire activates on them. If you do it right it'll go through the ledge and force them to do something. Dsmash is also really good for edgeguarding. I think the balloons extend the hitbox as well (anyone know for sure)?