Quote Originally Posted by Antagonist
Yes, disbanding a unit in a settlement (not sure about just being in the province) increases the population of that settlement by however many people were in the unit. You disband a unit by selecting it (right click on the unit's icon) and clicking on the sword button at the bottom left of the information screen. Obviously this deletes the unit, so make sure you know that you don't want it anymore.
It has to be in a city. I don't know if it is possible to disband troops in a province, but if it is you simply lose the men. Disbanding mercenaries has off course no effect on population.

Breeze, May I recommend reading Frogbeastegg's and Quietus' guides in the R:TW guide forum? These two guides contain far more information than the game manual.