A villager picked it up, i walked away, and now it's no where to be found. HELP!

Are you sure that it's not by the fire? Double check, and if your positive it isn't there, try closing the game and opening it again. Look back in the woodpile and you'll probably find it.

still not there.

There's a sticky thread that discusses the problem. The cauldron will most likely reappear within a day.