High popularity (the green face in your UI) attracts peasants, who are the lifeblood of your castle.
According to expert strategy guides, building a strong economy requires a specific order of operations:
Once you have a steady supply of stone and gold, build a church to further boost popularity, allowing you to raise taxes. 3. Making Gold stronghold-crusader-2-installment-tutorial
Place your stockpile near grass and stone patches. Build a granary quickly, but you can actually delay food production for the first ~10 minutes if you focus on popularity elsewhere.
Introduces iron mining and weapon production (swords and bows). High popularity (the green face in your UI)
Use Archers for range and Pikemen for defense. Stronghold Wiki notes that Pikemen are the best defensive units due to their high durability.
Iron can be turned into swords or sold directly for significant profit. Making Gold Place your stockpile near grass and
Start beer production (hop farms and an inn) and later candle production to keep people happy.