Game bugged out
I fought the battle in "A knight is born" quest, and was successful in it. Then I attempted to return to the world map. But for some reason, the loading screen stayed in, though I could hear sounds like "some of thy workers need to be given a job". So I shut down the game with the task manager.
Then I re-opened the game, and found myself in this situation: I had been thrown back to the point where I had neither completed the quest, or had gathered the army for it. In short, I lost the "game save".