However useless, the teacher is a permanent fixture at the school, so try to keep them on board and when you have to work with him, then don't show him up even if the activity is rubbish. If you work with him, then try to make suggestions outside the classroom so that improvements can appear to be coming from him, inspired by your presence to new heights. If you take him on in front of the students, it will be counter-productive and the barriers will come up. Increments may work better than rebellion.
Your idea of teaching them words related to their environment is a good one. Try to get that going- it can then be the basis for progress in talking about their lives, which is real communication and learning. But try at the same time to teach the teacher- in rural settings, it's not uncommon to find this sort of teaching and teacher, but I would allow farces in my presence and try to improve them before and after- during is not the time IMO.