Usually, a town's civilization level will increase after a certain number of monster lairs are sealed. A higher civilization level allows your residents to build houses that hold more people, from 2, to 4, all the way up to 8. It's a good idea to cause earthquakes in any land when the town reaches its highest civilization level. This will cause all older, weaker structures to be destroyed, but they will be rebuilt using the newer technology. This technique will exponentially increase your population.