The simple inhabitants of Pyrewood Village, which is located below the massive Shadowfang Keep, were simple, ordinary people. Due to unknown reasons, most likely due to the odd Pyrewood Shackles they wear, the townsfolk turn into rampaging Moonrage Worgen at night. The village elders most likely know some information as to the reasons the townsfolk turn into worgen, but yet, the elders remain humanoid at night.
The fact that the villagers look suprisingly like the Sons of Arugal commonly found in the area may be noted. It can be concluded that when Arugal took control of Shadowfang Keep, his dastardly experiments had a negative effect on the residents of the local village (who were employed at the Keep).