All buildings are constructed by selecting a category and then a building using the main toolbar. For example, to build a foresters lodge you would first select the button for Resource Production and then the button for a forester lodge.
After selecting the building, you can place it on the landscape. By default, you can rotate the building using the R and T keys. The green arrows on the building point to the front of the building, and show where the building may overlap a road. If a building cannot be placed, the green highlight will turn red.
Clicking the left mouse button will place the building. Some placed items, like crop fields and roads are variable sized. In this case you can click and drag over the landscape to place them.
Once placed, a footprint will appear where the building has been placed.
Before the building can be used, the area needs to be cleared of rocks and trees, construction resources need to be collected, and work needs to be done to erect the building. Clicking on the area where the building is placed will show build progress.
A combination of logs, stone and iron may be needed to build a structure. the needed resource can be collected from the landscape, or they can be produced using foresters, mines and quarries. You can place a building even if the town currently doesn't have the required resources. Once the resources become available, the townsfolk will continue working on it.
During construction, you can toggle the pause button to start or stop work on the building. This allows for laying out the placement of buildings early without having to build them.
Once the people have collected the needed resources, builders will be needed to construct the building. Over time you can see construction progress.