Hm, a whole host of setting problems stuck out like sore thumbs to me. Most of them wouldn't be issues, except this is a post-armageddon setting and you (Frogboy) have espoused that this game's setting will be engrossing. First off, making cities to function like tetris blocks strikes me as simply bizarre.
Overall, I'm not given the sense that the world is recovering from catastrophe at all. There's no sense of urgency and I really don't feel a sense of desperation and near futility. Why? Because there are simply too many circumstances where the setting would seem to indicate that things are proceeding in a normal fashion. I mean, inns? What's the purpose of having an inn in a hamlet of 30 people that accomodates no nomadic travelers? Inns are a product of mature, merchantalist economies.
And then there is the biggest setting killer: gold is a relevant resource at the beginning of the game and it shouldn't be. Honestly, if a few haggard survivors were emerging from 100 years of darkness, they wouldn't be concerned about gold. It would be utterly meaningless. Call it "an abstraction" (or a cop out) all you want, it doesn't substitue for the authenticity of demonstrating what people really would be concerned about: food, water, and safety. Perhaps the first level of buildings should require no gold at all, because the remnants of civilizations have no formal currency based commerce yet. At the very least, quests should reflect this fact.
Instead of some dude and his family offering you gold to clear out rats, they should offer their loyalty. So the quest should follow something along these lines:
You encounter a young, armed man in the wilderness. As he approaches, you can see that he is panicked.
"Madam, please help me! My family and I were living in a cave yonder when a colony of giant rats beset upon us in the night! Please assist me in rescuing them and you will have my fealty!"
When you engage in combat, the man joins you as an allied soldier. You engage the rats, but if you kill them too slowly, they begin to slay members of the man's family. After the fight is over, the number of civilians remaining join the city of your choice. If the young man survived, he joins you as an armed soldier. Personally, I'd like to see instances like these be responsible for most of your early population growth, rather than people just abstractly wandering in from the countryside. Prestige would play a role, but rather than just giving you a steady stream of citizens from god-knows-where, simply make prestige improve the perception of wandering bands toward your sovereign (thus making it easier to convince them to join you.)
It would be rather interesting to see prestige as a commodity in the place of gold at the beginning. In other words, you would have to spend prestige to raise an army early on (they would go to war for you out of trust not gold, after all, which prestige would simulate.)
Anyway, I'm sorry to say it, but the setting isn't shaping up at all to capture the depth of a D&D campaign as was the claim.