Digital village development is an important policy instrument for enhancing the effectiveness of rural governance, but in practice it has generated unintended spatial reorganization. Drawing on the case of a demonstration village within a National Intelligent Social Governance Experimental Base, this study, based on theories of the production of space and the space of flows, develops an analytical framework of “spatial encoding-spatial integration-spatial exclusion” to reveal the spatial mechanisms through which digital village development gives rise to governance alienation. The findings show that spatial encoding translates complex and context-dependent rural affairs into forms, coordinates, and work orders, using parametric visibility to redraw the objects of governance, boundaries of action, and hierarchical power relations. Spatial integration cuts through physical distance by means of data interoperability and real-time performance assessment, converting remote perception into continuous oversight and redirecting grassroots administrative time, attention, and fiscal resources into digital space. Spatial exclusion places informal governance practices and substantive governance matters that resist parameterization beyond the system’s field of vision, thereby inducing selective reporting, the batch production of documentary traces, and even the physical remaking of village landscapes. Rather than unfolding sequentially as a linear process, these three dynamics become mutually locked through encoding rules, resource allocation, and performance feedback, producing a “representational closure”: compliance-oriented representations generated by spatial exclusion feed back to validate the encoding regime, allowing governance distortions to become self-validating at the parametric level and to extend from data operations into physical space with technological upgrading. Digital formalism is therefore not a temporary consequence of inadequate technology use, but a possible endogenous outcome of the reorganization of governance space by digital technologies. The key to digital village governance lies not in continually adding platforms, data-collection requirements, and performance assessments, but in preventing parametric representations from substituting for governance realities and in rebuilding mechanisms of feedback and verification between digital space and locally embedded rural practices.