To get a Villager to become a Builder you must pay three Coins at the Builders Stall and stock a Hammer. Then a Villager will pick up the Hammer providing you have recruited one from one of the Neutral Camps surounding the Kingdom.
They will also be responsible for repairing any battlements that have been demolished in the night by Trolls.
Later in the game they will also operate the Catapults. Two Builders are required to operate one Catapult.
Without a job to do they will simply wander idle throughout your Kingdom but they are your first line of defense and as such are very important.
When attacked a builder will drop its hammer and revert into a villager again. If the troll was killed before it can steal the hammer then a villager will pick it up again if not it will go back to the stalls and pick up any tool that is in stock.