There’s a Famitsu article about how Animal Crossing uses symbolic design that leaves things open to imagination. It’s way too long and I’m not really a translator so I’ll leave some concept images from it

Things in Animal Crossing range from a scale of Symbolic -> Realistic depending on how much information is needed to be conveyed.

Villagers are the simplest so they can convey a wide range of animal types with just a simple symbolic shape while catchable creatures look more realistic to motivate players to gather them and learn about real animals.

Concepts of villagers drawn in different styles to figure out where they can emphasize detail without too much complexity

Concept art of the new villagers

Early older style grass and final grass design

Concept art of a retro fan. While designing items as well they tried to figure out what kind of details are essential to give the feeling of the item such as a fan and what isn’t needed

Here’s the full article in Japanese if anyone wants to see it

https://www.famitsu.com/news/202009/05205296.html