I was looking at this page of wonderful pictures of little people.
And the second one down gave me an idea.
While building a house, and I'd quite like one which suits a fantasy theme, you could build a sort of gnomes house into the wall, then go around and look for tiny replicas of things in op-shops or make them yourself.
Add a few tiny lights to simulate a fireplace and candles.
You get the idea.
Then finish it by closing it off with a removeable wooden panel with a mouse hole as the only viewing source, so that you have to get right down low to see in there and see how it's all setup, I think something like this would be lovely.