Dirt roads can be placed to increase the speed that citizens walk when they are moving from place to place. Stone roads can be built for even faster walking speeds, but come at a much higher expense.
Roads require builders to be available before they can be constructed. After placing roads, the builders will work on each section of road, removing rocks, iron ore, and trees that are in the way, and paving the path for citizens to walk on.
Buildings with included roads (Market and Well) always produce dirt roads around them. These dirt roads do not remove existing stone roads.