Planning permission was given by the council, though there were a lot of the agencies against it. You're point that privately owned land is in the gift of the owner though has to be disputed ;), planning laws are pretty strict for most of us surely.
I think the point is just because there is a village in the middle of Avebury Henge, should more houses be allowed within a World Heritage Site, it is setting a precedent.
Bet if the same five houses were to be built in any of the 'pretty' villages around the area they would'nt be allowed to butt up against a quaint thatched cottage, in fact they would'nt even be allowed.....