Pretty much, hillforts (or oppida in Latin) were defensive settlements built by the Iron Age Celts in Gaul and Britain. They were not usually a permanent place of large habitation (as they probably are in Bannerlord) but would usually have fewer than 60 families living there, and would be more centres of industry than habitation. However, in times of danger, a tribe, or even a part of a tribe, may seek refuge in a local hillfort, where they will stay until danger has passed. As said before, they do use geographical location for defense, which makes them seem poorer, but does tend to make assaults difficult, especially as the Celts defending would be able to bombard a climbing force with sling stones and arrows. In Bannerlord, they have stone buildings in the screenshots, so I guess that it is a more advanced version of a hillfort which will probably also be a city.