OP, your DH was wrong not to let you know and wrong not to have said no to his parents moving next door but it's now done.
I've been in situation of living in same house as prospective PILs which didnt work and I ended up breaking up with then ex fiance. Also been in situation where I had my elderly and terminally ill Mum move into an annexe my DH and I had done in our garden. Although it was a difficult few years because of her Illness I never regretted it and neither did my DH. It gave our children the chance to have more time with her. And my husband was completely onboard with this and totally supportive. But he and my Mum got on really well.
Would I feel like that if it was DH's parents either in annexe or house next door - to be honest the answer would be a big fat no. But then there is a history of family problems and I dont get on with them and have essentially NC.
You need to stop panicking and think about what your relationship is with your PILs. The good and that bad bits. What do you want to cultivate and what do you want to nip in the bud.
I think you need to sit your husband down and have a frank and open conversation with him and let him know not only your fears but how angry you are so he realises this is serious. This has been imposed on you with no discussion and if he wants this to work and if he doesnt want it to end up in divorce then he has to pull his weight to ensure it does work and that will mean establishing and supporting boundaries. You've got quite a few good suggestions on here including the garden, tech solutions and establishing what you BOTH are happy with and what you arent. I think you need to also tell him you are giving it 3 years and if it's not working out then the house will be going onto the market and the family will be moving. So it's in his best interests to ensure privacy and boundaries work.
Two other things I would say.
Firstly I dont know if his parents are manipulative or not, but you should have regular weekly catch ups with your DH (& your children if they are old enough) to compare notes about what is happening/being said and that everyone in your family unit are on the same page. That way you and your husband know what is working or not working with his parents and boundaries. Not properly communicating means surprises like your PILs buying the house next door happens. If something is done or said by PILs that upsets you, then that needs to be discussed with you and your DH and if necessary openly challenged with PILs. Secrecy and putting up with lots of irritations or snide comments are no good. They need to be sorted out to avoid upsets and resentments building. And your hubby needs be doing alot of the sorting. You also need to be assertive with them. If they say horrible things to you dont let it go - challenge it otherwise you are handing power over to them.
Secondly the other thing you should be thinking about is this. You (and many others here) are dwelling only on the negatives. Yes they havent consulted you which shows a lack of consideration and thought. But, they did want to move closer to be with you, DH and your kids. My PILs essentially dont give a damn about my children (wrong grand children)and are only interested in my DH when he can do something for them. They have always seen my children on limited basis - their choice, and why I stopped bending over backwards trying to make it work. I went NC with them personally because I found it upsetting to see my DH and children treated that way. And because I finally accepted that at the end of the day you cant make people care if they dont want to.
So what I'm trying to say is, as annoying as this is for you, your PILs obviously do care. Otherwise they wouldnt be moving. You need to harness that and take control. But also unless they are complete self centred manipulative @rseholes (like my ILs) also use this as an opportunity to build your relationship with them.