Campaigners have backed the Princess Royal for challenging the development of large-scale new towns and instead highlighting the benefits of limited expansion of rural villages.
Anne said many builders and local authorities favoured larger developments but smaller-scale projects could make use of existing village facilities, such as pubs and community centres.
The Campaign to Protect Rural England (CPRE) welcomed her intervention, saying it was important to have a "living countryside" with villages which grew "organically".
Deputy Prime Minister Nick Clegg has championed the creation of new "garden cities" in London's commuter belt, and Labour leader Ed Miliband has also highlighted the need for major housing developments.
But t he Daily Telegraph reported that the Princess Royal told the Rural Housing National Conference: "Is it really necessary to only think in terms of large-scale developments where you might add 10 or 15 thousand in a block where you require infrastructure to be installed? I'm not sure it is."
She added: "You will need a new school, you will need new shops, you will need to create a community centre, but for many of the small-scale developments you already have those.
"They may be underused, and they may be your church hall, but with a degree of investment could provide a centre for so many other activities."
Village development would also help keep local schools, shops and pubs viable, she told the conference in Cheltenham.
CPRE chief executive Shaun Spiers said: " We want a living countryside, not a countryside of commuter villages or retirement ghettos. The important thing is that villages should grow organically, with the consent of those who live there, and that priority is given to creating genuinely affordable homes for people with strong employment or family ties to the area.
"The way to do this is, wherever possible, is to have a community-led process which identifies suitable sites for inclusion in local and neighbourhood plans. With this in place, development is more likely to be well located and high quality, and therefore win local support."
But he also highlighted the need for redevelopment of urban areas: "I n terms of the scale of development that most people accept we need, the best value for society, if not for the volume house builders, will come from brownfield development within towns and cities, together with some well-planned urban extensions."
The Princess Royal is a patron of the English Rural Housing Association, and the organisation's operations director Martin Collett said she had been a " long-term advocate of our work, securing affordable homes in villages that benefit local people and rural communities".
He added: "Small, well-designed developments of six to eight homes built in partnership with the community can often be the catalyst that keeps local services open. Local and national policies should encourage and support the delivery of affordable rural homes and empower rural communities to work with organisations like English Rural Housing Association to tackle their local concerns."
A Department for Communities and Local Government spokesman said: " This Government's policy is to support locally-led development. We have put councils' local plans at the heart of deciding where houses should and shouldn't go and given communities more say on what's best for them through community-led neighbourhood plans."