If you placed a land tile with gears on it, you may choose to place 1 building OR 1 inhabitant on that land tile. Choose carefully: you can’t move inhabitants or buildings once they’re placed! You don’t have to place anything if you don’t want to.
Each space the building covers must have a gear on it.
Each space the building covers must be the same type of terrain.
At least 1 of the gears must be on the land tile you placed this turn. Buildings may overlap across land tiles.
You may place an inhabitant only on a gear, and only on the land tile you placed this turn.
Some building powers let you place additional inhabitants, on spaces without gears or on building tiles. That’s done on phase 3 (Use Your Buildings' Powers) and is a separate action from this phase 2 action of placing an inhabitant on a gear.