I haven't done any tests, but from what I've noticed, you can't build forts on tiles which have woods or water in them. How much woods/water until the tile is considered unbuildable, I don't know.

Also, a fort seems to enforce a zone of control about the same size as a stationary army does, and the ZOC's of 2 forts can't overlap too much. So you can build a defensive wall of forts, but it might not look too wallish on the campaign map.

Watchtowers and forts don't seem to like to co-exist either. So think about where you might need forts when you build towers, especially since towers seem to be permanent structures.