I've annexed all regions save for Thousand Voices forest. Is there a limit to the number of cities and town you can have? I followed various guides online and built 10 buildings in all villages, but only 3 of them could be upgraded to a town (Varnhold was already a town when I annexed it). I didn't get the project to innate the upgrade. Am I missing something? I have:

6 villages
4 towns
2 cities

Thanks.