Children sit behind their desks in a classroom, gazes fixed on their teacher; a group of elderly people chat while they wait for the bus; on the riverbank, a teenage boy in a baseball cap leans against a pile of chopped wood.

Viewed from a distance they are innocent snapshots of life in rural Japan. But on closer inspection, the residents of this remote, mountainous village reveal a darker truth. They are inanimate reminders of a once-thriving community that, like thousands of others in Japan, is staring down the abyss of extinction.

The dolls’ creator, Tsukimi Ayano, says they began life as scarecrows for a vegetable field that she tried and failed to get started after she moved back to Nagoro, on the south-western island of Shikoku, after decades living in the sprawling metropolis of Osaka.

Before long, Ayano was using the life-size dolls to replace neighbours who had died or moved away. Others, like the obedient children in the classroom, are modelled on members of her extended family.

At 65, Ayano is considered young by Nagoro standards; her 85-year-old father is the oldest resident. The 160 or so dolls dotted around the village dwarf the human population, which has fallen from about 300 when she was a child to just 35 today. There are another 200 or so dolls in nearby villages that, like Nagoro, have seen their populations plunge in recent decades.

A school classroom in Nagoro. Photograph: Elaine Kurtenbach/AP

“They bring back memories, particularly those based on people who have died,” Ayano said of the dolls, whose forms fill the spaces vacated by their human counterparts – checking produce at a vegetable stall, resting against a tree or waiting at the bus stop to travel to the nearest big town, 90 minutes away.

She recalled the old lady who used to come round for tea, and the old man who liked to drink sake and tell stories. “I look at them and think about their personalities,” she told the Guardian. “Some are still alive but no longer live here, so I just hope that they’re doing well.”

Nagoro is a microcosm of a seemingly irreversible shift that threatens to change the very character of Japan in the decades to come. The country’s skewed demographics were highlighted again recently in data showing that the number of newborn babies sank to a record low last year.

A bus stop for scarecrows in Nagoro. Photograph: Elaine Kurtenbach/AP

At 1.001 million births, the figure was the fourth record low in as many years, the health ministry said. The number of deaths in 2014 totalled 1.269 million, the fifth straight annual rise.

Japan is flipping the traditional pyramid-shaped population model on its head with fewer and later marriages marked by a low birthrate, and a soaring elderly population sustained in their twilight years by a low-fat traditional diet and universal health insurance.

Japan’s population, now around 128 million, is expected to dip below 100 million in 2046, according to the National Institute of Population and Social Security Research in Tokyo, and below 45 million in 2105. By 2060, four in 10 Japanese will be aged over 65.

A doll leans against a log pile in Nagoro. Photograph: Elaine Kurtenbach/AP

The government estimates that the declining birthrate and rapid ageing have left more than 10,000 villages across Japan battling depopulation. Those that fail to attract new residents may one day resemble Nagoro, where another foundation of civic life, the primary school, closed two years ago.

A villager has died every one of the 13 years since Ayano returned to look after her father, she says. Her mother, whose doll sits in her home, and whom she greets every morning, died decades ago aged 56.

“As much as I would like the village to come back to life, I accept that it’s not going to happen,” Ayano said. “In 10 or 20 years’ time, there will be no one left.

“It’s very sad, but times are changing and we have to accept that this is the way things are going to be.”