The Towers gives you space for defenders on the castle wall. As higher the total number of defender on your castle wall, the better is your defense, the higher chance that you can hold at least) one flank and prevent the courtyard bonus from your attacker. Each tower can hold a number of units, while the total number of towers is derived by your castle expansions. Upgrading towers requires that your castle wall will be the same level, so castle wall upgrade must be done in parallel to the towers upgrade. The last level requires you to unlock "high ground" in your "Hall of Legends" (sovereign buildings, line 4).