I still have the original disk for Castles that I, uh, "borrowed" off my brother-in-law, as well as the original disk and manual for Castles II. I won't lie to you, compared to modern games the graphics are primitive, and there's a distinct lack of tactical options available compared to games like Stronghold. Where Castles wins out is in *economic strategy*. Castles II expands your tactical options somewhat, as well as offering greater scope at the expense of Castles' charm. Both are great games in their own right and I tend to prefer replaying them.
Castles I is set during Edward I's castle-building spree to secure Wales... and you're Edward. You can choose from regular or fantasy campaigns, where you'll be pitted against the Welsh, and in the fantasy you'll get the addition of the Sidhe, both Seelie and Unseelie court varieties.
In-between the gradual building of the castle to your specifications and your defensive actions against Welsh or Sidhe raiders you'll find the nobility, the clergy, the peasantry, the Welsh, and others will occasionally gain an audience with you. Your decisions can affect the status quo dramatically: strengthen your army, your coffers, annoy the Welsh profusely, incite unrest—or quell it—in the nobles' fiefs. There is a surprising amount of variety in the type of matters that'll be brought up, anything from peace treaties or alliances with the Welsh, friendly chats with the clergy, the peasantry whining for good reason, the peasantry whining for no reason, you can even fund Flemish rebels purely to spite the French.
The game-play is deceptively simple; you need taxes to pay for workers—and the amount you set their wage at limits the amount of each labourer (or soldier) that will work for you. Is it worth making infantry's wages £5 if you rarely use them, or is it smarter to have troops to spare to put down problems outside your current operational zone? Can you afford so many stonemasons when you're busy being petty with those darn French? Is it even possible to pronounce the name of the Welsh prince you're currently allied with/waging war on?
Castles II is set later; the King of France decided to croak it without leaving an heir, so naturally France should be part of your realm now, right? Unfortunately other nearby European kings want it as well.
Castles II is more sophisticated that its predecessor, in many ways it feels much like what you'd expect Medieval: Total War to be were it made in '94. This time 'round there's resources to be gathered, siege weapons to be built, and armies of infantry, archers, and *knights*. You've also got an annoying Catholic geezer with a pimpin' hat to keep onside unless you particularly like getting excommunicated (and facing the distinct possibility of the Pope giving some other sod his seal of approval)... though you can annihilate the Papal States and take France by right of arms if you're good enough.
Throughout it all you'll have diplomatic relations with your neighbours to consider, and all manner of interesting scripted events. Things are quite different depending on which faction you take control, how fast you move to secure neutral territory, how you react to the Pope's regular extortion attempts, your rivals' extortion attempts, and your decisions regarding the various audiences you'll grant and be granted over time.
So there you have it. Stronghold if it were made in '91, and Medieval: Total War if it were made in '94, both with oodles of charm and their own subtle nuances. You could certainly do far worse with your money.