The player guides citizens of a remote community of outcasts to grow and maintain a settlement through a command economy. The game focuses on the player’s town as a whole, with the citizens of the town acting as a resource to be managed. The player must assign citizens to various jobs such as a builder or fisherman. The citizens then perform the job without specific direction from the player. Citizens have needs that must be met in order to keep them happy and healthy, such as ensuring enough food is available or that they have a home. Additional citizens come from two sources, the birth of children and the arrival of nomads, wandering groups of citizens that wish to join the player’s town. Citizens age and eventually die.
The player must order the building of various structures in order to support the citizens, such as houses, blacksmith shops, hospitals, farms, and schools, while ensuring enough resources are being produced to keep the citizens stocked. The player must balance the use of resources against the town’s growth.
The developer states that “the townspeople of Banished are your primary resource. They are born, grow older, work, have children of their own and eventually die. Keeping them healthy, happy and well-fed are essential to making your town grow as you have to deal with relentless weather conditions, fires, depression, starvation, an aging population and more.