The castle level represents the strength of your kingdom and is indicated by a small grey tower icon in the upper right hand corner of the game screen, between the energy and experience bars. The number next to the icon shows your current castle points. The higher your current castle level the more gloomed areas you can explore and add to your kingdom.
Increasing Castle Level
There are three ways to increase your castle level:
Placing Royal Buildings
Royal buildings are the easiest and most efficient way to get more castle points. Building one of these often requires a lot of materials and pretty much always gold bricks are involved so it's advised to always have a good supply of those. Each royal building gives a certain amount of castle points once the structure is completely built and crewed. Currently there are 17 different royal buildings you can place in your kingdom.
Leveling Up Royal Buildings
Crew members you have appointed can level up your royal buildings for you. When they visit your kingdom and tend the royal building they are a crew member of you get one additional level-up point for that building. Once the building has reached a certain number of these points it'll level up and the number of castle points it provides will increase by 10% of the original castle points of the building. For example if you reach the first level up of the Maiden's Tower which gives 80 castle points you get 8 additional castle points and thus have a total of 88 points for this building. The maximum level for each royal building is level 10.
Royal Decorations & Walls
You can also increase your castle points and level by placing certain decoration items in your kingdom. Decoration which provide castle points can easily be found in the market because they have the same grey tower icon attached to them. Note that you can only place a limited amount of royal decoration items in your kingdom, depending on your current level.
You can increase your castle value by placing hanging banners on certain Royal Buildings. Each hanging banner increases the castle value by 25 points.
With the new unicorn pair release, pairs of neighbors can inpire unicorns by 40 inspires to reach the epic level. Once a unicorn reaches the epic level and the unicorn has "released" its accumulated inspirations the castle level is increased by 20 points for each unicorn.