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Well that would still include potential reasons the game offers.
So is the only potential reason "I like a big village"?
Generally I like when the game responds to stuff you do in it. E.g. you can make a big village, it has htis and this pro and this andt his con, and you'll have to deal with A, B, and C. Or you could keep a small village which appeals to it's own set of things. Or you could decide you don't want one at all, which again leads into another playstyle, and so on.
and offers more condensed forms of crafting stations
you can of course just ignore it entirely and focus on going after towns and simply mooch of them
or ignore those entirely and live off the land though you'll typically want to have a base to pay taxes since the karma penalty and late fees can be annoying to work around
But there's a lot you can do with them. Residents of various jobs will passively generate resources for you. Some of them don't serve much purpose since most resources just feed back into the crafting/basebuilding loop that never really results in cool new gear to use in dungeons or anything, but if you can set up a steady production of goods to sell an a shop in a little town with high tourism bonus, you can secure a pretty hefty stream of cash.
I think the biggest reason, though, is to make a big town so you can maintain a bigass farm, because one of the most reliable ways to raise your potentials is via high-level food, and you can only make that out of good ingredients with a lot of farming to improve crops. If you don't put some time into farming and cooking, your skills are going to level a lot slower than a gourmet player who always adventures with his cooler chock-full of handcrafted food to optimize every point of satiety every time he gets hungry.
Learning how food works is a whole journey of its own, though, so if you're really not interested, yeah, best to ignore it. Elona/Elin is a very sandboxy game, do what you want!
And yeah, just a lot of "sandbox" games where it just means you can do stuff, but the game world also doesn't really react. So it's more "action" than "interaction". so I'm always curious about these