Yeeah the anime goes quite fast so it gives you no time to digest the information to figure out what's going on.
So here's the supposed timeline of what's happened.
Festival Night - Keiichi and Shion went with Takano and Tomitake into the shrine shed.
Day 1 after Festival - Apparently Shion was publically declared missing.
Same day Keiichi met with "Shion" at the library and was interrupted by Oiishi. Oiishi asked Kei if he's seen Shion, Tomitake and Takano since festival night.
That night, "Shion" calls Kei and tells him what happened to Tomitake and Takano where Kei freaks out on her.
Day 2 after Festival - Village Headmaster (VH) went to appointment outside of town. That evening, he came back to the village. Barely made it in time for village meeting. After the meeting, VH disappears.
Day 3 after Festival - This is where this episode begins. "Shion" tells Kei that she confessed what they did on festival night to VH on the morning of Day 2. But her story doesn't hold up since she couldn't have told him in the morning cos he went to his appointment. Suspicions rise cos she doesn't know about the appointment or which hospital he went to. Which means she prob told him after the meeting.. which would have been when he disappeared. Meaning this entire time.. Keiichi is talking to the culprit.