Settlements are the major demographic centres of your nation and are thus vital hubs hosting infrastructure, and are a form of production structure in that they can be used to train workers, and expand your territory by increasing the size of area within your borders. Almost all enhancements and all military production structures (except barracks and airstrips) must be constructed within the radii of settlements.
Generally, settlements have three stages of growth:
- Default size, with China they are upgraded instantaneously to Cities.
- Can be used to host Armouries (1 per settlement) and Munitions Plants
- Stronger and with greater radius than normal Town. A settlement becomes a City whenever 5 different structures are constructed within its radius.
- Can be used to host Heavy Engineering Depot and Naval Yard
- Largest settlement. Stronger and with greater radius than City. A settlement becomes a Major City whenever 9 different structures are constructed within its radius.
Thus, because of the different needs of military buildings, caring for your urban infrastructure is important in order to increase the variety of your units and the power of your arsenal. And because of this, land is somewhat important due to limited space within city limits in order to balance economic and military strength. For instance, in order to maximise artillery and armoured car production you might need to build a new city and then dedicate it fully towards military production, by building as many munitions plants in the vicinity.