I attacked the Gilden sovereign and killed him.  Several turns later I founded a new town on the spot where one of the Gilden's towns had been, next to a spot of fertile land that (I think, but I'm not 100% sure) that he'd already built on.  A while later I tried to build a farm on this fertile land, but could not because the farm option was greyed out:

I think I've seen this reported elsewhere but couldn't find it in the forum.  In case it's not a known bug, here's a saved game so that you can look at it, and here's the debug.err.