This is basically straight-up punishment for socialising. Particularly when the difficulty lies in getting the game started, there's not much value in the GM sitting there saying "The town is burning down..." "There goes the clock tower...", "The mill just exploded..." and so on. If players are taking their time about a decision or a reaction, then you can use one of these, perhaps, but doing so repeatedly is just exacerbating a symptom, not doing anything about the underlying cause.

There's a book called A Magical Medieval Society - Western Europe, which ISTR should go some way toward answering the questions. Helpfully, there's a free download of the Cities chapter available from e23.sjgames.com/item.html?id=XRPFREE1

What timeframe, within the game world, are you looking at, and is this going to be protrayed over the course of a campaign, or are the PCs going to enter play partway through that process?

Point. I've edited in a few now - they're reasonably basic, but all contain solid onward references.