The Strategic Hamlet Program was adopted from the British, who used it to quell the Communist insurgency in Malaysia. Basically, round everybody up into a small group of villages for their "protection". Assume everyone who doesn't stay in the village is the enemy.
Notwithstanding the abuses in Malaysia (I'll leave it to others to question the necessity and efficacy), it definitely didn't translate to the Vietnam context. For one thing, in Malaysia the Communists mostly came from the ethnic Chinese community, who were a minority and already highly concentrated in the cities.[1] Vietnam had/has a similar ethnic Chinese minority (wealthy, urban, etc), but they were Capitalists, not the Communists. The pool of Communists was everybody else, the largely rural population.
[1] Interestingly, to this very day Malaysia still has laws which prevent Chinese from owning certain types of rural property, ostensibly to protect the rights of the rural Malay population. I don't know, but I presume such laws have always been in effect in Malaysia, even before the colonial era. At the time of the insurgency rural Chinese were probably already a suspicious group. In hindsight the insurgency was just an excuse for the powers (British, majority Malays) to reinforce the stable status quo, which is why the program "worked". In Vietnam the status quo was increasingly untenable.