Get your companions settled (I roll with ten, depending on what you're up to you may have only eight) and skill them up to cover you in the important skills. Surgery and tactics are by far the most important two, then wound treatment, pathfinding and first aid. Get your character to a decent level (~20 or 25) doing whatever build you like -- at that point I usually don't have much for leadership but I do have Power Strike and Power Draw at 10 and Surgery/Tactics at maybe 5 or 6. You can do this just by thumping bandits. While you're doing this you should be doing a ton of quests for all the villages within easy reach of whatever you're going to take over first (I usually get Singal first). I aim for about 90 relations with about five villages in a loop near my target town, it's best if they're villages of another faction than the one you plan to attack, so you probably want to pick a border property to attack first. It's imperative in this stage that you go around and build a business in every city on the map -- you will have to do a few quests for uncooperative lords to get this done but it isn't too bad -- doing this will give you a passive income of about 8.5k which helps a lot, but it does cost a lot of money to set up these things, so make sure you're hitting the tournaments really hard.
While I'm doing this I also start building relationships with lords by doing quests for them. I want to have four reliable lords (check this thread and the documents therein for a list of them: http://forums.taleworlds.com/index.php/topic,317058.0.html) to 50 relations before I start any ****. I won' t finish doing this until the end what I do in the next paragraph. Also while I'm doing this I send every companion I can find on the Right to Rule quest (Let me ask you something... > Do you know I aspire to be king of this land?), especially the ones that aren't currently in my party. This means you hire literally every companion you see -- if they don't fit in you can just tell them to leave right away but then in the future travelers will tell you where they are. This will get your Right to Rule rating up to 45 or so eventually which is critical for when you found your kingdom -- without it no lord will respect or join you and it'll be you vs. the world, with it many lords will come and try to serve under your banner (if you let them) and that means they aren't fighting for the enemy against you in a huge ******** stack.
Once my party is rounded out and I'm leveled decently I start doing Knighthood Order quests. Pick your favorite knighthood order (I favor Eventide above all others -- best sergeants by a mile IMO, which are also decent archers, very reliable knights, plus their Lordly helm is the best possible helm you can get and you get it for free by doing enough quests -- 64 head and 10 body for that one piece and it looks great!), find out where they're based and start doing quests for them by talking to the guard in the castle. If they just cuss you out it's because you either don't have enough renown, honor, or you have negative relations with them. Dawn and Eventide both have negative relations to start -- to fix this find one of their spawns (Eventide spawns near Singal) and follow them around or kite them into fights, then join on their side and help them and get +4, repeat as necessary. If you don't want to mess with the relationship stuff then try the Knights of the Lion in Sarleon. Doing these quests for your order will give you large amounts of those factions knights and sergeants for free (well, there's a hiring cost and the weekly wages but you don't have to train them or spend prestige on them or anything else), good armor, etc. One of the quests involves winning honor for that faction by going around and winning fights with a special crew of only those knights that is given to you and that can't be topped up and won't allow others to be hired in while on that quest -- it can be hard to find enough big fights to hit your targets for this quest UNLESS you sign on as a mercenary while they're going on with some warring faction (talk to a lord of that faction, ask for a quest, they love to offer you the "hire you as a merc" quest). This will give you plenty of large armies to fight and with your band of top quality knights you can usually take down armies with 2 or 3 times as many troops as yours. There are several ranks to rise through, once you hit the top rank there'll be a big seige battle. After this battle you can still go and do quests for your order and get the rewards of big piles of good troops for little effort (comparatively).
If you haven't done the relationship work with villages and lords before you finish these quests I would strongly consider firing all my knights and going back to just my companions to finish that. You also want to save up at least 250k.
Once you've finished this you will have about:
-2000 renown and 250k dinars
-5 villages with about 90 renown near your target city
-45 right to rule
-Top notch equipment for yourself
-Good (8+) surgery, tactics and wound treatment skills either on you or in your party
-A solid group of companions covering most of the party skills you can't
Then build your seige army. I like a lot of huscarls and maybe 25% archers, I back them with order knights and seargents but you save a ton of money and actually have much better seige troops if you hire infantry and archers instead of trying to all-purpose it with knights. Let your merc contract expire and start hitting caravans of the faction you want to attack. Once you have negative relations with them you can seige and probably take their city if you catch it at base garrison -- even easier if you catch it just after its lost a fight (some people start in Laria or Ethos and try to get the Noldor to sack those towns before they start).
The real issue isn't taking the town, it's keeping it. Within like five real time minutes of you taking the town you can expect a stack of about 1000 to come and bash into your city or castle. I use that time to run around frantically to my friendly nearby villages so I can pump up the garrison as much as possible before they hit. With luck you can have ~200 of the troops healed up that you used to take the city and ~200 ****ty villagers to stuff at the bottom of your troop order just to give you better odds in the defense. If you can break their first assault then you're over the hump. Just start raising hell with them, raiding their villages, KOing their lords over and over (let the ones with good personalities go free -- the ones who are jerks you can imprison and just hold so they don't respawn so quickly. Each time a faction army gets defeated the lord has to buy himself a new template of troops based on how much money he has, so making him do this over and over and ransacking his villages makes his armies slowly weaker. What you're really hoping for however is that a good lord (one of the ones you went to 50 with) will join you -- they'll be more tempted to do this if you have unassigned lands. Anyway, after raising hell for a while you can start asking for peace at the start of battles and you may eventually get it.
Once at peace you'll need to rebuild your treasury (if possible) and recruit like a madman. You want like 2000 guys in your castle or city. With about 1000 guys in your cities they won't get attacked very often (if at all) by enemies and you don't have to run to hell and back trying to not lose territory you spent so much time taking. You get 2000 so that when you next go to war you can then scurry between your old town and your new one depositing tons of troops before the retaliation wave hits, things get easier and easier from there. (For a while, eventually all the lords you didn't recruit will be bunched together in some remaining corner of the map and you'll be fighting against 2000 troops all the time, but at that point if you've followed my advice you'll have probably one lord with 1000 of his own troops and a bunch of others with 300-500 under their command that you can bring along to dogpile the enemy and still come out ahead.)
This many troops are expensive to maintain but what you do is stuff them in there then give that city to one of your chill ass lords. Don't give it to any **** lords, they might leave, so again it's important to know the personalities of the lords you command (figuring that out is in the document I linked to above). If you make companions lords be aware that they have personalities as lords as well! You will have to look on the wiki for that, but the only companion lord who has an acceptable disposition and is noble is Sir Rayne. Honorable lords also like you more when you grant territory to other lords -- neutral lords mildly dislike it (so you have to have feasts sometimes or help them in battle to maintain relations) and **** lords really hate it when anyone but them gets territory which means they're going to leave shortly after you get them and aren't worth having to begin with. The only territories you keep for yourself really are your first town / castle for sentimental reasons and to have a place where you can dump troops (and maybe to build a knighthood order there -- note that Eventide doesn't require Qualis gems to build, only that Sir Alistair is in your party, which is another great plus for them -- you may however want to build a custom knighthood order there instead) and villages. Every other castle / town should be stuff with 1k troops and then given to a lord IMO.
This may seem like overkill but if you plan to keep what you take and grow steadily from there you need to do most of it for things to go smoothly. For the rest of the game it will be imperative that you keep track of lord personalities and convert as many as you can to your side, and that will include doing stupid menial tasks for them from time to time and releasing them from captivity in battles as often as possible (except for the ones you don't want joining anyway). If you can't convert lords to your side your foes just become more and more concentrated and your climb to power just becomes more and more steep.