Happiness

If happiness is higher than 50, experience gain speed (STR, DEX, CON, INT) increases. If it's lower than 50, it decreases. New peasants will arrive more frequently if the average happiness in the village is high.

Happiness can be increased by eating different types of food, being indoors, and/or being next to decor items. Happiness decreases as village population grows.

Happiness increases when decor elements are nearby. Decorative buildings of the same type don't stack, and only the building with the highest happiness bonus will have any effect. Being indoors also grants a happiness bonus. Happiness level in the main square is always equal to the highest happiness level in the village, and can't be less than 10.

There are 4 types of decor: chests, floors, flowers, and statues. Happiness can also be affected by other conditions, like weather, having a roof overhead, bed quality when sleeping, the feudal lord on the throne, etc.

You can open the territory decoration map and roof map by pressing (Key L).