It is a bad idea to have coastal settlements as castles. If you want to make copious use of gunpowder troops you should have a huge city close to the borders stay a city, so it can pump out gunpowder troops. You should have all settlements in your heartlands, places you’ve conquered that are within your empire, away from the borders as cities, as they will hopefully not be assaulted and will make the most money this way.
Castles are far better at resisting sieges and are much harder to assault than towns. It’s best to have castles on your borders with people you are at war at or will be at war with soon, which is basically everyone because of the shoddy diplomacy. They also are the only places where you can train gunpowder troops, as you can only train gunpowder artillery in castles, not infantry or cavalry. Towns also grow faster and can build much larger religious buildings. Towns are harder to defend as they have lousy walls compared to castles. Towns are unruly and need a much larger garrison, even with public order buildings. Cities will provide much, much more income than castles will, but they are a lot harder to keep loyal, as castles have much higher public order and you can get away with just 2 or 3 units garrisoning or maybe even none. Next you have to organise what settlements are cities and which aren’t. The whole point of growing your cities, besides to access more advanced tech is to tax them. Building farms everywhere when you have money to burn is a good idea, as it brings in even more money and grows your city faster. If the settlement has a good farm income, say 250+ florins you should build farm improvements to improve it further, building farms in poor areas will encourage more population growth, as you are providing a food surplus.
The type of harvest you get is random and better harvests bring in more income. At the bottom you will see the farm income and what sort of harvest it was. Open the settlement scroll then click the show settlement details button at the bottom of the scroll and then click the scales icon on the bottom left of that scroll to find the economic status of the settlement. Farms increase population growth and money from farming income. Send a diplomat to every faction you can and ask for trade rights and offer map information or a few florins and usually they will accept. Trade rights are also very important for your financial health, as they bring in a lot more money from trade with other factions. Mines cannot be destroyed, so if you take over a settlement that has a mine you will get their mine too and they can get yours. Mines are expensive at first, but they provide a substantial reliable income that never changes like farm income does. Always construct roads everywhere you possibly can when you have the funds. Roads increase trade by quite a bit and they enable your armies to move much further than they could otherwise. Without roads your economy is utterly stalled and will never be anything. This guide will give you a quick rundown on generating a huge pile of cash to fund your expansion. Without money in M2TW you are nothing but fodder to be chopped up and ground into a red paste. Without money you can’t create buildings, train troops or even defend yourself. Getting an economy is the stepping stone to everything in m2tw. Guide to building a stable Economy in Medieval 2: Total War
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