Occupation is the process of occupying a conquered enemy city. When a civilization weakens a city and sends a melee unit in to capture it, three options (or four, if the city formerly belonged to another civilization) are displayed on-screen:
- To Liberate the City means to return the city to its original owner, whether that be another civilization or a city-state. If the city is the former capital of a previously eliminated civilization, liberating the city returns them to life (only the capital can be liberated if the civilization has been previously eliminated). Liberating a city for another civilization will substantially improve relations with that civilization; liberating a city-state will result in many turns of alliance. Either way, liberating the city avoids occupation unhappiness and reduces warmonger diplomatic penalties substantially.
- To Raze the City means to rob the city of all its wealth and burn it to the ground. This completely removes the city from the map and seriously harms relations with its previous owner. When razing, a city will decrease in population by one each turn until the city is completely destroyed. Note that cities which are being razed are annexed first (giving the civilization the full unhappiness from occupation), and razing can be cancelled on any turn before the city is destroyed by going into the city screen and selecting "Stop Razing." A civilization's original capital, city-states (that haven't been acquired with Austria's unique ability or a Venetian Merchant of Venice), or Indonesian cities that provide a unique resource according to their unique ability cannot be razed.
- Another option is to Make the City a Puppet, which will add the city to that civilization's territory in all respects except that there will be no control over production, tiles worked or specialist use. The benefit of this option is that the city will not produce unhappiness from occupation while in the puppet state and puppet cities do not impact the amount of culture required for the next social policy. However, the city will still produce the normal unhappiness from population and the increased number of cities. The city's governor will focus tile use on gold production and exclusively build gold and happiness-producing buildings along with defensive structures (Walls, Castle, etc.). When at this stage, a city can be Annexed at any time. (In Brave New World, the Venetians can buy units and buildings in puppeted cities; however, they may never annex their puppets unless they lose their capital, in which case the new capital will be annexed.)
- The final option is to Annex the City, which means to totally occupy the city, turning it into a normal city for the civilization. The city will produce extra Unhappiness every turn until a Courthouse is built, at which point the city will return to normal. Additionally, for a number of turns after the city has been occupied the population will be in resistance and all production will cease. The number of turns this happens equals the amount of population the city has after being occupied. In Brave New World, Resistance duration and population loss in a captured city can be reduced if the civilization that captured it has enough Tourism in the city's former civilization.
Trade Caravans can be built in main (or annexed) cities and sent to puppeted ones, with the ability to improve their population via food delivery (which requires a Granary) or improve their production capabilities (which requires a Workshop). Also, occupied cities can join the road/railroad network of the empire and Workers can improve tiles in that city's territory under the direction of the occupying civilization.