A province containing a Castle is treated as if it were of the Castle owner's nationality for building purposes.

That is, if you own a province that is not of your nationality (you conquered it from the barbarians or another nation), and you prefer to build your own units there rather than units of the conquered nationality, you should build a Castle there.

The province reverts to its original nationality if the Castle is destroyed.

Players most often build Castles in provinces that have large urban centers, near the front lines. This allows them to build their own units where they are useful, rather than building them at home and spending several turns moving them up to the front.