Fill Both Need Categories Before Upgrading
To level up a settlement, fulfill its consumption needs in both the food and equipment categories. Then select Level Up on the settlement screen, just to the left of the mayor's portrait. In the October demo, settlement progression stops at level 2.
The official demo FAQ gives that sequence directly. A region producing many goods is not enough by itself: the settlement you want to promote must actually have its own required consumption needs fulfilled.
Build the Supply That Fulfills Those Needs
Check which food recipes and equipment the target settlement is set to accept. Within a region, connected vendors deliver products once the receiving need is assigned and enough goods exist to send.
Connect central market squares with roads, rather than assuming a road near the settlement is sufficient. If water prevents the connection, use the bridge tool first. The FAQ warns that deliveries may not begin immediately because an adequate amount of product must be available.
Equipment also helps solve an earlier expansion bottleneck. Supplying Peasants with wooden chests or wool tunics unlocks another building slot, letting an existing settlement add production instead of relying solely on new settlements.
Use the Level Up Button and Commoner Tabs
Once both food and equipment consumption requirements are fulfilled, return to the settlement screen and use Level Up beside the mayor portrait.
After reaching level 2, open Buildings and choose the green Commoners icon. An available plus slot lets you select higher-level buildings, including small markets and raft ports. The Needs tab also has a Commoner view, so check the correct social class when planning the next stage of supply.
Additional equipment at level 2 can increase the maximum workers in buildings, while more recipes improve efficiency. Those benefits help the newly upgraded settlement function; they are not a substitute for fulfilling the needs required to perform the upgrade.
Separate Demo Limits From Supply Problems
If the settlement has reached level 2 in the October demo, the next tier is outside that demo's stated progression. The developers announce settlement progression up to level 4, Artisans, and Patricians for the planned November 5 Early Access release.
The FAQ also notes that you can level one settlement down to level another up. It does not provide a universal numerical promotion allowance in that answer, so use the current game's regional information when deciding whether to redistribute upgrades.
FAQ
Where is the Level Up button?
It is on the settlement screen, just to the left of the mayor portrait.
Is food alone enough to upgrade?
No. The official requirement covers consumption needs in both food and equipment categories.
Why did producing the required good not immediately unlock the upgrade?
The settlement must receive and fulfill its assigned need. Check road connections, source stock, the selected recipe or equipment, and whether delivery has had time to occur.
Can I level a demo settlement beyond level 2?
No. Level 2 is the October demo's stated cap.