What is the legal ruling in Islamic law regarding the women of the village sitting in a silent circle around the deceased in his house or courtyard before his ritual washing?

Consolation (ta'ziyah) is recommended. It begins after death and is prescribed for women as it is for men. However, what some women do by gathering around the deceased in the house or courtyard does not appear to be permissible, due to the incitement of sorrow it causes, its encouragement of wailing, and the debasement of the deceased involved. Therefore, sitting around the deceased before burial is prohibited if it leads the family of the deceased beyond permissible weeping into wailing, or if it is intended for its own sake, or is motivated by a false belief, or imposes hardship on the deceased's family, or involves disrespect for the sanctity of the deceased.

As for merely sitting in the deceased's house without any specific ritual or wailing, there is no harm in it.