Learn Croatian: Mi smo sada u selu. - We are in the village now.

The dictionary form of the word is selo, which is a neuter noun. Because we are talking about a location, we use the preposition u (in) followed by the locative case. For neuter nouns, the locative case ending is -u, so selo becomes u selu.

Why do we use the preposition "u" instead of "na" for a village?

In Croatian, u is generally used for towns, countries, and enclosed spaces, while na is used for open surfaces, islands, and events. A village (selo) is treated as a defined settlement, so it takes u, just like a city does (u gradu).

Is it mandatory to include "Mi" at the beginning of the sentence?

No, you can safely drop it and just say Sada smo u selu. The verb smo already means "we are", so the pronoun mi is usually omitted unless you want to emphasize who you are talking about (for example, "WE are in the village, but they are in the city").

What is the difference between "sada" and "sad"?

There is no difference in meaning; both mean "now". Sada is just a slightly longer version of sad. You will hear native speakers use both forms interchangeably.