Would you pay $375 for the so-called peasant dress featured in this article? I wouldn't; it's not my style, anyway. The article did say that the term peasant dress isn't new; it describes a loose-fitting dress, often with buttons down the front and with an elasticated wasteband waistband. (Sorry, corrected 19 April; thanks to Caroline for pointing out the error, caused because I copied and pasted from the aforementioned article without reading it properly!)
I looked up peasant dress in the Oxford English Dictionary. It's not in, although peasant-style is -- the citations refer to a headscarf as peasant-style headwear, and to a peasant-style shirt. I couldn't resist looking at the etymology of peasant, and was interested to see that it comes ultimately from the Latin pagensis, meaning 'belonging to the country'. Pagensis itself derives from the noun pagus, country district.
The word pagan, too, has its roots in pagus, although the noun and adjective for a person in this sense was paganus. The OED has several notes on why the word for countryside should have come to mean a non-Christian. It notes that the older sense of the classical Latin paganus is 'of the country, rustic'. It is possible that the transferred use to 'non-Christian' reflects the fact that the ancient idolatry lingered on in the rural villages and hamlets after Christianity had been generally accepted in the towns and cities of the Roman Empire. The Dictionary also notes that "the sense heathen arose from an interpretation of paganus as denoting a person who was outside a particular group or community, hence 'not of the city' or 'rural'".