The 1st category included simple fences, residential small homes, towers, the ferry, and stables; things that were mostly living space provided by the building. These types of buildings were not hierarchical, and once built they could not be upgraded again. Thus, the fence could not be upgraded. It would have to be removed to construct stronger walls of brick.
The 2nd category included the smithy, tailor shop, woodshop, dojo, or hospital; buildings that produced something based on skilled experts. The smithy, for instance, did not determine if it could only build farm tools or also weapons; it was dependent on the level of the smith.
So, the level of those buildings was directly tied to the level of the expert working there. So when basic smith Li Tiezhu was promoted to an intermediate blacksmith, his smithy was likewise improved from basic to intermediate grade.
The 3rd category was a shipyard building. This type of building also relied on skilled personnel to achieve its function but was also very dependent on the facility itself.
Even if his shipyard had an advanced shipbuilder, but because the grade of the yard and dock were still at the basic level, so was the entire yard. Thus, the building itself had to be upgraded, as well as the person inside had to be at the right level in order to improve.
The 4th category included the village temple, ancestral hall, the market, and the barracks. These buildings themselves needed to be upgraded and didn’t require skilled personnel to do what they needed to do. Thus, to improve them, you had to acquire higher level building blueprints.
The 5th category were resource acquisition buildings, like the logging site, quarries, and mines. The level of those buildings was related to the volume of resources stored there and the number of people working them. As long as the resources stored were rich enough and the workforce expanded to a high enough level, they could be directly promoted.
According to the game settings, the basic level was up to 100 people. 100 to 500 people was the intermediate level, 500 to 1000 was the advanced level, and more than 1000 people for the special level.