at least for me, the idea of happiness is closely linked to politics. After all, what is politics other than giving the masses the illusion of happiness? I also think happiness is an aspect of politics since, if people aren’t happy, it could lead to revolts and what not. In fact, this is the crux of “politics” in other, lesser games (Total War series, for example). It’s an important element to be discussed because it could define the parameters around how politics actually works.
Building off of my previous post, perhaps you could add objects within buildings or modules to buildings or buildings in general that would produce special units. Generals would give armies a boost, while a “department of finance” (for lack of a better term) would help organize taxes/crops. Or maybe you could have a guild system, where the head villager of the alehouses, hospitals, temples, etc. could make demands of the player and if the player completed these quests they’d be gifted some sort of benefit.
Diplomacy is the best way I can see “politics” working, but I’m not sure the OP (original poster… I don’t know if that term is used outside of the Escapist ) is wishing to discuss diplomacy.
Besides that, having a some sort of political game where you appease factions within your settlement would be hard. Perhaps you could do it tropico style, with subdivisions of “military”, “religious”, “scientific” etc. people all have certain demands/requests and the player has to meet them. Still, I’d be concerned that a system like this could take away from the game, and a more “baseline” happiness system like the ones we’ve discussed might suit this game better.