For anyone who hasn't read the UK PC Zone M2TW article

[screwtype]

Actually, on re-reading that, I see something I missed:

"As the game develops, cities will become more important but re-developing castles will be costly, so the transition will need to be carefully managed."

That sounds to me like the choice won't actually be a fixed "either-or" choice for provinces. Rather, you'll be able to change a castle province to a city province, but at a cost.

So the essential concept seems to be more along the lines of, say, establishing a castle when first capturing a province or when the province is still hotly contested, and converting it to a centre of commerce and population later in the game.

That makes some sense to me, I think I can accept that as a game mechanic.