Taking a town is one thing; holding it is another. Your occupying soldiers do not float in some abstract limbo - they garrison the town they captured, and how long they last there depends entirely on that town's happiness. Before we get to that rule, though, we need to clear up a myth that trips up a lot of new commanders, because it is the exact opposite of the truth: your foreign garrison does not need housing in the town it holds. Getting both of these straight - what does not limit your occupation, and what does - is the difference between conquests that pay you for months and ones that quietly crumble.
Housing never limits your invasion
Here is a rule worth stating plainly, because it is the opposite of what many players assume: the town you are attacking does not need spare housing for your troops. Your occupying force is a foreign garrison, not a crowd of new residents - they do not move into the town's houses and they do not compete with its citizens for rooms. So a town with zero free rooms can still be attacked and occupied, and a town with three empty rooms will happily hold twenty of your soldiers. However many of your troops live through the battle, that is exactly how many stay to garrison the town - not one fewer. There is no penalty for sending a strong force at a small target: the only thing that ever thins your garrison is the fight itself, never a shortage of beds.
Housing only limits your own home troops
Do not confuse this with the houses you build at home. Your own soldiers - the ones defending your own town - are residents, and they do need rooms there, just like your citizens; that is why you raise housing before you train a large home army. But that rule stops at your border. Troops you send abroad to occupy someone else's town are a garrison, not residents, so the target's housing is completely irrelevant to them. Housing governs the army you keep at home, never the army you project onto an enemy.
Happiness is the lifespan of your garrison
Here is the rule that governs every occupation: your troops live in the captured town for as long as that town's happiness sustains them, and when the last soldier dies, the town is free again. A happy, well-run town keeps your garrison alive far longer than a miserable one. This ties the length of your occupation directly to the health of the town you took - a thriving target is a prize worth holding because your soldiers endure there, while a wretched, unhappy town will see your garrison wither quickly and the occupation collapse on its own.
This creates a genuinely interesting tension, and it is one of my favourite pieces of the whole design. The best towns to occupy are the happy, productive ones - they pay the richest tax and they keep your soldiers alive the longest. But those are exactly the towns whose owners have invested in keeping them pleasant, which often means a strong defence too. Meanwhile a sad, struggling town might be easy to take, but it pays little and your garrison dies there fast. So the ripest target is not merely the weakest one; it is the one whose value and holdability justify the force it takes to crack it. Learning to read that balance is the strategic core of choosing where to strike.
And notice how neatly this hands the defender a way to fight back without a single soldier. Because your garrison's life is tied to the town's happiness, an occupied owner who keeps their town wretched is, in a sense, poisoning the well you are drinking from - your troops die faster in a miserable town. It is a slow, passive resistance, but it is real, and it means occupation is never entirely comfortable. You hold the town, but you do not fully control the thing that keeps your grip alive. Every occupation is a clock ticking down, and the town's owner has a hand on the speed of it. Next we turn the whole chapter around and look at war from the receiving end: what to do when it is your town under occupation.