Like cities, Colonies are the primary building blocks of your empire.
Any colonist can found a new colony. Colonies can be built anywhere except on mountains, water tiles, or right next to existing colonies. It is highly advised to build in a place where the new colony will access to both ore and lumber. Forests are plentiful in the New World and therefore finding a site near a source of lumber is usually not difficult. If a colony does not have a source of ore in its radius, the ore or tools will have to be shipped in from elsewhere.
The center tile of a colony automatically yields two of its resources, and one of these two resources is always food.
The other resource of a center tile is never lumber, and colonizing a forest tile with lumber as special resource would be a pretty bad idea. If possible the other resource is also never ore. In other words, it will be the best resource (e.g., tobacco or cotton) a colonist on an ordinary tile could work on, excluding food, lumber, and ore.
Unlike Civ games, only the nearest 8 squares are workable by a colony.
If you move the last colonist in the colony to the area in the lower right with a fence, you will prompted,
"Shall we indeed abandon our (name) colony, Your Excellency, forfeiting all of our hard work here?"
If you choose Yes, the colony will be no more. However, if a Stockade, Fort, or Fortress has been built, you will receive the message,
"We cannot voluntarily reduce below three the population of a colony that has a stockade, fort, or fortress."
A colony can never be completely starved to death, because the center tile will always produce enough food to support at least one colonist.