Paths designated by the player enable communication and transport through the settlement, which begins at the player's castle. The ends of paths are always denoted by flags. People and goods circulate through this path network. Goods circulate in a human chain system, in which workers take goods from one flag and drop them at the next one, and goods accumulate at flags (a maximum of eight items per flag); a priority system, which is tweakable by the player, decides which goods are to be taken first.
Priorities are there to decide which goods at flags should be transported first, which of the four mine types (iron ore, gold ore, coal or stone) receives food first, where raw materials coming from mines go, where iron goes (blacksmith or tools maker), and a variety of other prioritisations. Tweaking them properly is encouraged.
If placement of buildings and roads is not carefully planned out by the player, so that different paths for goods use the same waypoints (as an extreme, having only one central castle), it inevitably will lead to traffic jams. If no counter action is taken (re-routing the goods, distributing more warehouses, better planning out where to place buildings), such single bottlenecks can spread out and jam more and more waypoints, leading to shortages because goods can not reach their destination fast enough anymore.
Despite the appearance of rolling hills, all paths and game maps are built on a grid of overlapping hexagons, with flags and buildings positionable at the vertices. A regular hexagon denotes perfectly flat land, while pulling in the vertices gives the impression of steepness.
Although small, the workers in the game are extremely detailed and cleverly animated. Each individual worker may be followed around by the player, and always acts in character. In several of the buildings, workers may be seen working inside. Only when completely cut off from their road network (e.g. by enemy invasion) do workers wander aimlessly around.
The atmosphere is enhanced by background music. If this is turned off, digital sound effects of the various workers are played, alongside other ambient noises such as the tweeting of birds, the grunting of pigs, the yells of the knights in battle, or the sound of wind in the mountains.
Compared to modern games, The Settlers is quite a slow-paced game; unlike its sequels, the game time cannot be accelerated. Some time-dependent features of the game can therefore take a long time, such as upgrading a freshly recruited knight up to the fifth and highest level. But knights also get stronger with the amount of gold possessed by the player's kingdom, and gold can be mined to this end. While the statistics dialog of The Settlers does feature a 50-hour scale, and on a big map a game may last even longer, a typical campaign is won in far less time.
Consequently there can occur seemingly curious aspects of time dilation. For example, a farmer can sow and reap a full field of crops in half an hour, the same time it may take a fisherman to catch a fish, or the player to carry out an invasion against an enemy stronghold.
As well as ensuring military supremacy, the entire economy of the kingdom is under the player's control. There are three sources of food:
Food of any type is necessary to feed miners, who dig for four materials: coal (for smelting ore), iron ore, gold ore and stones (for building with).
Two types of smelter will take one unit each of coal and gold or iron ore and produce (respectively) a pure ingot of gold or a bar of iron. Gold is required to "pay" the knights (and makes the knights stronger at attacking enemy guard huts/watchtowers/castles).
Many other classes of worker exist in the game. Stone cutters cut from piles of stones which lie on the surface; once these are exhausted, stone must be mined. Woodsmen plant trees as a renewable resource. Woodcutters chop down the trees into logs. Logs are taken to the sawmill to be cut into planks. Planks and iron can be used to make tools by the toolmaker. Iron and coal are required by the smith to make weapons (without which the knights cannot be armed). Geologists may be sent out into the hills to prospect for ore. Boatbuilders take planks and make boats for transport across water. Finally, builders take planks and stone and construct new buildings to order. Simple huts require only one plank and one stone; complex buildings (such as a new stock house) may require several units of both planks and stone, and a long time, to complete.
The player may divert resources according to need; for example, once a good stock of boats is built up, it is no longer necessary to waste planks by giving them to the boatbuilder. The player must also choose how much wheat goes to the miller and how much to the pig farmer.
A series of intuitive graphs and flowcharts allows the player to supervise the economic life of the kingdom and make small adjustments to optimise production.
Once the kingdom has achieved a certain size, it takes on a life of its own, and a flourishing economy will almost run itself, which is one of the many satisfying aspects of the game. While some resources (trees, wheat, etc.) are available in infinite supply, others (notably ores) eventually become exhausted. Strategic players attempt to cut off enemies from these resources, and invade their territory to capture them. On a more minor level, the woodcutter and fisherman will each happily wander onto enemy territory and cut down their trees or catch their fish.
The series' original title in Germany is Die Siedler, marketed in the rest of Europe as The Settlers. When the game was first released in the United States, it was renamed Serf City by US publisher SSI. However, starting with the second part in the series, The Settlers also became the official title of the series in the US.