This is probably my favorite scene from the movie. Lt John Dunbar (Kevin Costner) sets out to find the Sioux village but finds Stands With A Fist (Mary McDonnell) performing the traditional act of bleeding for the loss of her husband. After passing out, Dunbar realizes that she is a white woman and takes her back to her village.
The beauty of the village is deliberate. Costner and Blake wanted to contrast the "ugliness" of Fort Sedgewick (as being not in harmony with nature) with the Sioux village as beautiful (as being in perfect harmony with nature).