If a village burns, it loses hearths, if a town gets sieged, it loses prosperity.
Those affect how much a town/village produces, and how high prices are for goods. Prosperity goes up over time for each town, 'hearths' go up over time for villages. If you quick scroll the list, I've bolded some keywords for ease of locating infoĮconomics spoilers, some campaign mission spoilers, and quest spoilers are here I'll throw a bunch of info out there and keep it short. I'm writing this in May 2021 v.1.5.7 or 1.5.8 or whatever it is now.