Cities generate much larger income and are technological centers of a faction, but are more difficult to defend and only have access to militia troops, which are generally inferior to those trained at castles except for a select few unique units.
Castles have better defensive capabilities and have access to a larger selection of soldiers, but generate less income, cannot train as many priests as cities, and have no access to higher civilian technologies. Unlike previous Total War titles, there are two kinds of settlements, each with different advantages and disadvantages: cities and castles. Each faction controls a number of settlements, and must conquer others in order to continue growing.