This is indeed an algorithm that was used to compute such as image. Compared to a stupid algorithm that would shrink the image down to a 256x128 color coded and then look for the closest color in minecraft (16 wool vs 255^3 computer coded), the algorithm I use has a method called "differing" that basically mixes pixels close to each such that when looking from afar either renderer or the human eye makes a single smooth color and shapes. This is why when looking close on the door you can see plenty of light blue "dots" that when looking from afar mix with he gray and give this nice blue grey color from the original picture.
As for pixel art - good luck doing such an image using the human brain by stupidly looking at each pixel and looking for the closest color. Here is an example of such a stupid algorithm's result :
VS (differ ON)
When it comes to pixel art, nothing needs to be deliberately controlled by the artist.
Here is a definition : Pixel art is a form of digital art where images are created and edited at the pixel level using graphics editing software. What defines pixel art is its unique visual style, where individual pixels serve as the building blocks that make up the image. The effect is a visual style very similar to that of mosaic art, cross-stitch and other types of embroidery techniques.
I think that downsizing images whilst attempting to keep the same shapes, colors, and atmosphere, with a 16 color code and 30 thousand pixels at most is damn fun and i'll be doing more daring arts in future.