When a villager masters 3 skills they become an Elder and a totem appears in their honor. It usually appears in the place he or she gets the final amount of points in that occupation. Like, if he is farming it may appear in the garden or sea, wherever he just finished a job. You can move the totems around for display by grabbing the top and dragging it. You will need at least one totem to do the final ancient area after uncovering the mosaic.
Watch the Details page on any villager to see if they are close to master something and keep them working on it.
btw there are only 50 totems and 50 tombstones, so if you keep playing as long as I did the first time, I had 53 Elders when I quit, but the final 3 didn't get one.