Hi bagpus,

The town needs to be near a beach, you can't build Harbours on raised coastline.  Hope that helps.

The spell that Sethai mentions is called 'erosion', which is a level 3 spell. In order for the harbour to be built, the harbour needs to connect between the city and water so there needs to be one tile (or slightly less) between the city and the water. If the tile is not a sandy beach but a cliff, the erosion spell will turn the cliff into beach. Building a harbour is a little quirky so ypu need to be careful about placement and make sure the harbour icon is aligned properly before you right click to set it down. I find that this is easier if you use the erosion spell twice, one on each adjacent tile. I would recommend that you also download the 'Fish Market" mod which will give you a valuable food resource even if the city doesn't have a farm. Let me know how you make out.

what do harbors do exactly?  I've never built one...

Harbours allow you to train and deploy a boat. With the new maps with ver 1.19f, I have found boats to be somewhat useful for scouting/ colonization. A harbour will also allow you to build a fish market - provided you downloaded the mod, of course - that will give you food resources even if your town doesn't have a farm. To Kapeman, try deleting the "fish market" mod and then reinstall it. I had the same problem and got it to work after I did that. I think it happens sometimes when you download a new iteration of the game. Try it and see if that works. You will know if it is working after you build a harbour when you see a fish market option in the build menu. Incidentally, boat movement really calls for an extra tile of movement and I think Kael is addressing this and other movement issues for ver 1.3. Oh, I almost forgot! If a you build a harbour and have trained a boat but can't deploy it, Save your game and then exit Elemental to the desktop. After you restart the game, you will be able to deploy the boat.