I don't think that he can take out the entire village in one night by himself, but there is a way that he could do it secretly over time. Remember when the white Zetsus were copying people and infiltrating the joint ninja army? Everyone thought that it was genjutsu.
Itachi could use genjutsu on a few people, and over time build up a small force that could go around and try to assassinate people in their sleep.
Remember he did take out the entire Uchiha clan in one night, which was the strongest clan in Konoha, and that was when he was 13.
It is unlikely he would take out the top people by a surprise assassination attempt, due to guards, etc. but if he has Kisame and Konoha ninjas under genjutsu, it would be easier to fight a regular battle once most of the people have been killed in their sleep.