To colonize a city you first have to declare war against it, click on the city you wish to colonize and click on the “Declare War” button. Then you have to wait 30 minutes for the war declaring period to end before you can launch your colonization attack.
Click on the city and click “Colonize” to launch the colonization attack. You need to attack the city successfully to start the colonization, so make sure you send enough troops to win the battle. There is a certain colonization time before the city becomes your colony, this is called the suppression time and is 8 hours, during which you should keep sending more troops to the city. The person you are trying to colonize can also send reinforcements to the city during this period to a possible massive battle at the end of the colonizing period. If you win the battle at the end of the 8 hour suppression time the city becomes your colony. If this city has less than 1,000 prestige, I would not worry about doing this. If they have less then 10,000, send troops twice.You will get gold and resources paid in tribute from the colonized city, the city become a vassal of yours. You do not get to choose the percentage of the colonized city's resources.
The options you can use on a colonized city are as follows:
- Tax Imposition
- Food Levy
- Pop. Redeployment
- Sow Discord.
At some point your vassal, or colonized city, can rise up against you. There is a quest in Evony Age II that is called uprising and says you can do this if your city is colonized. You can also issue your own anti-colonization quest to help you rise up against your Suzerain. In April, there was an update to how many colonies each of your cities can have. Evony increased the number of colonies that players can own. Every city can now have a maximum number of colonies equal to the number which is the lord’s title level multiplied by 10. This means that civilian can have 10 colonies for his 1 city, knights 20 for each of his 2 cities, so 40 total, baronet 30 for each of his 3 cities, so 90 total etc. Prinzessin would then following this rule able to have 100 colonies for each of his 10 cities, which is a total of 1,000 colonies. This does seem like a lot of colonies, but it is how I understand the post. The title number for Prinzessin is 10, 10 times 10 is 100, and this is for each of the players 10 cities.
Thanks to http://www.evonyguide.com/wiki