After a bit of shuffling around, I managed to make a space for him; I had to box him in, to stop other people hitting him. Kinda hope I get to keep him now.
I've seen this happening around smp1 a bit, it happens when someone has a lot of villagers on the res.
Iron Golems will automatically spawn in places like NPC villages naturally, provided there are 16 adult Villagers and at least 21 houses (counted as doors). An Iron Golem will also spawn in player-made villages. The chance of spawning is 1 in 7000 per tick - quote from Minecraft Wiki
Heh, I agree, I use too many scare-quotes. I just put it in quotes because it's what it says on the sign above the portal