The Citadel allows you to build structures which, in turn, allow you to unlock new abilities.
Dungeon[edit]
For a cost of 250 gold you can build a dungeon in your Citadel, which allows you to capture enemies and ride captured mounts.
The Dungeon also allows you to build a Mage Tower and Stable.
Mage Tower[edit]
For a cost of 400 gold (after building a Dungeon) you can build a Mage Tower. The Tower allows you to learn spells from your captured enemies.
For more information on the spells acquired in the Mage Tower and how to research them, see Spells
Stable[edit]
For a cost of 500 gold (after building a Dungeon) you can build the Stable. This allows you to train mounts and increase their effectiveness in battle.
For more information on the mounts, what they receive through training, and how the training is done, see Mounts
Forge[edit]
For a cost of 600 gold you can build a Forge, which allows you to create new magic items. In order to forge the items you'll have to capture Runes in various places on the map.
For more information on the items built in the Forge, and how to create them, see Items
The Forge also allows you to build a Siege Workshop.
Siege Workshop[edit]
For a cost of 800 gold (after building the Forge), you can build the Siege Workshop. This allows you to attack and capture cities on the map, which will generate income for you (received when you pass through town after a certain amount of time has passed).
Temple[edit]
For a cost of 1000 gold, you can build the Temple, which allows you to improve your hero's skills.
Towers[edit]
For a cost of 1250 gold, you can build a Tower. The Tower reduces the chance of rebellion in cities you have captured (using the Siege Workshop) by 50%.
Vault[edit]
For a cost of 1500 gold, you can build a Vault. This will increase the income you receive from captured cities by 50%.
Statues[edit]
For a cost of 2500 gold, you can build Statues. These grant a special award - King or Queen - which improves Morale by 5.