The village chieftain is the chief of the Indian village.
If you talk to the chieftain, he will tell you that he wants to drive out the Europeans. He will then ask which port his warriors should attack, and you can recommend he attack one of the nearby European ports (but you can not recommend an attack on pirate havens, minor settlements, or other native villages). If you recommend an attack, then three native war canoes will sail out of the village. They will then sail to their target port, reduce its population, and return.
This can be useful if you want to weaken a port before pillaging it.
Another common strategy is to attack the native war canoes before they reach the port, and then sail there yourself and collect promotions for removing the native threat. This strategy does not adversely affect your relations with the village Chieftain, and he will not even mention it if you return.
You can purchase food, sugar, and spices from the Chieftain. However, he will not have as much of any of these things as ports do.