You can build cities only on fertile tiles. Fertile tiles can be easily identified, because they always show the resource icons (food, material, essence), just like when your capital levels up. They are also usually guarded, so you need to destroy the lair first. Because there is no manual. At least I couldn't find any on Steam or the homepage. There is an Early Access Manual, but that one is quite outdated (it's from the start of the EA-phase). Still, it might help to explain some things.