I have heard many stories of spanish villas and it is my personal dream to own one. The question is where are they. I am curious as to where I can stay at one of these places.

What do people say about spanish villas'

Jesus Gil is the man you want to talk to, he might be offloading a few properties soon-ish

I will be in valencia/madrid/barcelona in march. i was thinking it would be a nice alternative to hotels

I get the idea you might be looking for things like "turismo rural".
An example would be http://www.charoshouses.com/ which is in the "charming places" category and very typical. Not a Grand Villa, which would be more city-oriented, but one of many hundreds of wonderful, dreamy, places to stay - - pretty much anywhere in Spain.

The main association that deals with these sorts spots is called ASETUR and found at: http://www.ecoturismorural.com/Asetur1Uk.asp