Players can build blocks and structures in their territory and nowhere else. Players can gain new territory by placing some kind of magical flag in unclaimed territory.
Players want to build houses, farms and castles, but they don't want unprivileged characters to mess with their buildings or build structures right next to them. Because a magical flag is needed to start new territory, players can't just walk somewhere place 3 blocks and leave. We expect players to realize these flags are rare and using one should be well planned. We also hope the magical flag will be useful as a strategical combat mechanic, because when the flag is captured, the territory will change owners.
There are a few reasons to claim territory. A simple reason is that a player is motivated to be creative and build something interesting. To extrinsically motivate players, territory can be used to defend special items, gather and craft some resources and to get a higher social status. Expanding and maintaining territory is a core part of Veloren and there's always something to do, like planning a new house, hiring new NPCs to build something, farming and crafting or defending against an incoming wave of enemies.
It's also possible to claim enemy territory. For that you need to own territory right next to enemy territory. Then you can expand your territory into the enemy territory. Because killing enemies gives you power, one faction can continue to expand into the enemy territory. There are some rules that determine if one territory can claim part of another. Territory that is nearer to a flag and was claimed recently needs much more power to claim. This means that the defending faction can't immediately reclaim lost territory.
Every player starts with a single magical flag, which is a block. When it is placed in unclaimed territory, the player claims the surroundings as his territory. This means he can place as many blocks and prepared structures in it as he wants to. When a player builds blocks near the edge of his territory and he has enough power, his influence will be expanded. Power is a resource representing territory usage. The more a player uses his territory, the higher his power over it will be. When a player builds a farm for example, his power for this territory will go up. Other things that can increase power are:
Creatures living there (NPCs, animals)
Big contiguous structures like walls
Killing enemies near that territory
New players should buy materials and workers for their projects from the next city. They should try to make their territory profitable as soon as possible. This means they should build a farm that creates crops that can be exported without much processing. With the money earned this way they can continue to buy workers so they build the first house and maybe a fence around the territory. While the player waits for his farm they can explore the surroundings and kill NPCs that give valuable loot. When the territory gets big enough, some NPCs might want to live there with the player. This means they take part of the farm to feed themselves but help the settlement where they can. This can go on until enemies realize that the player owns food they can steal (this depends on the power). At some times in the night these enemies will try to attack the base to get what they want. When more valuable resources are exported, smarter enemies will attack as well.