@helloWorld: you also have to have enough money to build either one. As I can remember a watchtower costs 200 and fort costs 500. (correct me if I'm wrong.)
also the terrain has to be suitable for those building, e.g. you can't build a watchtower on bridge.
another hint: you know how to recruit mercs? building towers and forts works just the same way. it's the button right next to it.