Update: Added tons of things. Ive done allot more then this and will post the rest tommorow.
Ok, the first problem is your palette :
You are using 19 colours, and a few of them are almost identical. No wait, 20, I forgot to include the skintone. It's a waste of colours and if you're after an 8-bit type of look you're going to need to cut down on the colours. For instance, the samurai in red is using 7 colours, whereas 8-bit uses 4 colours (including transparancy) in an 16x16 (I think, please correct me if I'm wrong) radius.
Another thing you're doing wrong is that you're colouring with a shade of brown that goes directly from light brown to dark brown. You have to think about light, if it's during the day then the lightest part are going to have sort of a yellowish hue to it whereas if it's night you're going to have to add a blueish tint to the lightest parts. Once again you have to work on contrast, some pieces are almost identical in the brown colour and the parts where there is no light has to be almost pitch black. You have to work with defining the shape of everything too, use shadows and light to make everything pop out. It looks like it's completely 2 dimensional, there is no depth to the house or anything. The railing for instance needs to pop out more, whereas the wood behind it has to be darker to give it contrast so that you can see that it's actually railing and not just something plastered to the wall.
Right now it looks like a big mess of random lines in various shades of brown, you want it to stand out so that you can tell that it's actually a dojo and not just something that looks like a dojo but in various shades of brown.