Lord Parkin
aka emperor
As a general rule of thumb, mines and cottages are usually the best options in the early game. Watermills and windmills do not become very worthwhile until later in the game, when their tile yields are increased (with techs like Replaceable Parts and Electricity, and civics like State Property [from Communism]). But once those techs are discovered, watermills and windmills become very nice options to consider.Mines are preferable unless the city is genuinely short of food; even so, I tend to prefer irrigating a tile, especially after Civil Service makes that easier and Biology makes it more fruitful.
Cottages are crucial to the game unless you're playing with a Specialist Economy, and even then you need a few cottages. The best place for them is on riverside grassland tiles since the tile feeds the citizen working it and provides +1 gold.
Watermills are best used for a specialized city. My ironworks city is usually based in a city with lots of riverside grassland tiles, and yes, I'll plow under mature cottages in favour of watermills there, though not without a tear or two.Check the link to Intermediate Tactics and Gambits in my sig for a detailed description of building a riverside ironworks city.
Connect it up to a source of fresh water (a river or a lake), by "chaining" irrigation from the river or lake. The "chain" must be unbroken, so you must have a farm on every tile from the river or lake to the tile you want to irrigate. However, the "chain" can be linked up via tiles connected vertically, horizontally and diagonally, so you have plenty of options for how to get the irrigation "chain" set up.How do you irrigate a (farm) tile??
