Yes, PVP is enabled. Also, I really really appreciate the name of the NPC village :) Dry Dry Outpost...I get the reference, love it.
Mega-bear, there's nothing to worry about. Regulith has already stated just about everything that can be stated, there's nothing to worry about. DJ is being investigated, and just remember to notify me if something else happens either on here or on the kodleeshare forum (although I'm more active here).