Players over several long campaigns having levelled into the high teens can get into the final stages of the story line for the character. Players choose to make castles, create new towns and make businesses that can change the campaign setting itself. At some point you need to step in and say okay that's it you can have some say in this but I can't have the players running the world. So when is it best to step in and "take the reins"?
When it stops being fun or when it stops being manageable. As long as your group is continuing to enjoy itself, and looks to be able to keep doing so, there is no good reason to stop. I know D&D 3.5 isn't particularly focused on realm management, and that sort of thing can be a major nightmare for the game master, but just because your trending in that direction doesn't mean the game needs to end. Personally, I would look to see if there are compatible systems for dealing with those sorts of things as well before I gave up.
A character becomes an NPC when the player chooses to retire them.
If your players are enjoying the castle-building and such, feel free to allow it. I've had entire game sessions where players did nothing but plan castles with antimagic walls, or survey the kingdom they conquered using a loophole regarding incorporeal undead with the ability to create spawn.
Use their late-game assests as a plot point for adventure. Have an army attack their castle, a dragon attack their town, or thieves target their business. If they've conquered the entire world, bring in other worlds.
If they've really conquered everything there is to conquer, and there's nowhere to go from here, then it's a good spot to end the campaign and start a new one.
A few times I've seen PCs be retired:
- A player is significantly higher level than the other party members. If the high level player is above the others enough that the challenge either isn't there for the character, or to up the challenge, the other PCs are dying, then have the high-level character either choose to stop adventuring and settle down, or go on a very sacred/holy/important quest solo.
- The PC either possesses knowledge that would ruin the fun of the other players.
- The PC concept does not work with the rest of the party.
- If 2 characters just never get along to the point or ruining the fun for others involved, then one (or both) should be swapped out with more complementary PCs.
- The player's goals change. (A shadowrun adventure, the character fell in love, and decided to go "legit").
- Playing the character is not fun. I was new to a system, thought I had set up a character to fit my mental image of him. I did a very poor job. He would go into "death's door" in EVERY COMBAT. He even was nicknamed "Kenny" (of South Park Fame).
- The obvious time to "retire" a character, when s/he dies. Especially when you are using a system that lets you resurrect characters with minor/no penalties (and once you are at 10th or so level, even losing a level isn't that huge IMHO).
- You mention the situation where a character starts building castles and dealing more with the shyster who tries to rip him off for castle renovations instead of slaying the dragon. You can't kill the lazy shyster, but these situations can get old fast... especially if the King wants the character to actually BE a Lord of his barony.
But regardless of the situation, if the character is still alive they should never truly become NPCs. If the retired Fighter is the local Lord, and the current group rescued Miss Hamlet from the Orc warcamp, have the Lord host a banquet in the character's honor. It's a great way to play that character again for a few scenes (or an entire evening), and yet the character won't unbalance the game. However, if the player's new PC needs to talk to the old PC, then the old PC (typically) is picked up by the GM for those scenes.
I would argue that something like building your own castle or your own town would be something which would require all of a character's time. Or, at the very least it would require enough of their time that adventuring would, for the most part, be impossible. If your characters have amassed enough wealth that they can build a castle or a town, you might consider a couple of options:
- Forced retirement: If they want to undertake a massive undertaking, make it clear that such an endeavor would require most of their time and they would have to leave the party in order to fulfill their new responsibilities. At that point the PC becomes NPC. If they decline and think they can do both, go to option 2
- Start throwing in problems: For instance, since they aren't around to monitor the building of the castle, they don't find out until too late that their chief architect has embezzled 50% of the gold and run off. Now their castle sits half built. With no funds to pay workers, they have all left and the adventurer returns from their latest campaign to discover an empty work-site and collapsing infrastructure. Or, without their leadership to guide their new town, the town council have descended into constant squabbling. As a result the taxes are not being collected and the town infrastructure is falling into disrepair or isn't getting built at all. And without funds from taxes, the town watch has quit and raiders are pillaging the town on a regular basis. They might even return to find that as a result another hero has taken control of the town and the town has been renamed in their honor and the PC finds they no longer have any place there. In their absence the town council has voted that all previous contracts and obligations with the PC are rendered void.
- Real Estate Boom: They might also find that the economy in the area has really been booming and they find that land and materials now cost much more than they used to. As a result, they really don't have enough to build a castle or a new town in that region. If they move on somewhere else and try to build a castle or town, they find that no one wants to sell them the land or come work for them because the PC is an unknown in that area. They must continue adventuring in order to gain a reputation in these new lands in order to get anyone to assemble under their banner.
The second option and third options would even create some good opportunities for new adventures for the PC as they try to hunt down the thief or they try to find a way to restore their reputation with the town that they abandoned to run off adventuring or to build up their reputation in new parts.
As an aside, if they are amassing that much wealth before they hit "epic" levels, you might consider that your giving them too much treasure.
When someone gets tired of playing their character, but doesn't want to just kill them off. Also if someone gets heavily invested with castles and land mantience, they should be quasi-NPCs, they act like NPCs most of the time with the DM doing the day to day grind, but the player still gets to handle any major decisions for what they do in response to world wide events or major issues that crop up. And occasionally break out of retirement to get this or that.
It can work out well if a character with the leadership feat does this, as they can take over their cohort to remain with the party as eyes and ears, while the followers stay with the leader and work/live on the lands he has. This of course breaks the cohort dynamic somewhat, but it's fine if you wanna roll with it, just don't penalize the leadership guy for releasing the cohort and it works fine.