In the start of the game the King explains that the kingdom is in turmoil and a weakened kingdom will soon be the prey of other kingdoms.
All the Kings men are busy trying to keep the kingdom together. Therefore it is up to you young squire to go to the forest of Aratha and help establish a stronghold.
This means that you will have an outpost that will be developed during the game. You will get quests like
1. Supply the outpost with defenders (50 swordsmen and 50 archers)
2. Free the ore mine from ghosts so that the production can resume
3. Get the right to harvest wood in the elven forest (by doing quests for the elves to prove that you will not cut too much)
4. Clear the whole area of bandits and wild animals so that the civilians can do their business.
Slowly the outpost will become a castle. You could influence its development through quests so that the castle can be differend depending on your quest fullfillment (what troops can be recruited, what people live there (and their quests)) and so on.
I am ranting now - sorry
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