Lord British begins by showing off Kingsport Village and talking about how housing is one of the big features and choices of the game. The video continues to another town where the devs fade player housing in and out to demonstrate how towns might be built up over the course of the game. The housing decoration system and the different types of dwellings were toured, including Germanic, Druidic, and Nordic dwellings.
He also shows off the female avatar, crafting, and the "natural language conversation system." The latter allows players to type full sentences to NPCs, who will then parse the conversation for important keywords.
We've got the full developer commentary video for you after the break.