If you tap the resource bar (in city or field view), at the top you’ll see three statistics related to population: Population, Idle Population, and Population Limit. The Population Limit is the maximum number of people your city is capable of housing, which is determined solely by your Homes, both how many you have and each one’s level. The Population is your actual population, which is your Population Limit multiplied by your Happiness percent. For example, if your Happiness is 75%, and your Population Limit is 10,000, your Population will be 7,500. We’ll look at Happiness later. Finally, your Idle Population is your Population minus your workforce. Your workforce are the people working in your resource buildings; each one employs a certain number of people, depending on its type and level. There is no way to directly see the size of your workforce.
Having lots of idle population is a GOOD thing! Your idle population are the people who will get trained into troops. The higher your idle population, the more troops you can train at once (assuming you also have enough resources).
When you start training, both your Population and Idle Population figures will temporarily decrease. They decrease by the same amount, the amount of people that you just put into training. These figures will gradually come back up to their normal levels. The speed of this replenishment is affected by your city’s Happiness. The higher the happiness, the quicker the replenishment.
Happiness is simply 100 minus your Tax. For example, if your tax is 25%, your Happiness will be 75%. I personally keep my tax at 0% because gold comes easy when farming other cities.
If you set your tax to 100%, your population will gradually decrease to zero, and you will have no income at all. Also, you will have no resource production, either, because there are no workers for your resource buildings. Conversely, if you set your tax rate to 0%, your Population will max out to your Population Limit, but you will have no income. Mathematically, you get the best long-term income with a tax rate of 50%. This is a good rate to have in the early stages of the game, when you need gold for research but can’t yet get much from farming (attacking other players to steal resources; we’ll look more at farming later). Later, as you can get more gold from farming, you can start to decrease your tax rate, eventually to zero, which will give you more idle population to put into training at one time.
Note that changes to your population are gradual (except for starting training, which immediately decreases your population by the amount put into training). If you change your tax rate, it will take time for your Happiness to adjust, and for your population numbers to adjust as well.