The great conceit of Hinterland is that it's built around stripped-down versions of two endlessly compelling gameplay systems. The first is the classic city-building dynamic in which the player tries to marshal area resources, recruit citizens and construct buildings to create a functional, prosperous and eventually powerful medieval town in the Hinterland of an unnamed fantasy kingdom. The kicker is the way this is accomplished, through a simplified Diabloesque click-slaughter-and-loot system built around the main character and recruited parties of up to three other town citizens / adventurers.

The combination of city-building and RPG adventuring is absolutely brilliant in concept. Players start out with just their own character wearing junky adventuring gear and a house in the middle of a hostile land filled with monsters of varying degrees of power. Every few game-days people will come into town as "visitors," stick around for a while and then leave. If the player believes that their professions can somehow help the town, they can use some of their stored gold to build them a house. Once visitors become citizens, they start to work offering various services. Farmers and herders, for example, grow food. Craftsmen build arms and armor that can be used to outfit the player or other citizens. Merchants make money, wizards research spells, guards protect the town from monster incursions and so on. The goal for the city is to create a profitable and attractive medieval hamlet.​