Game Rules Guide

Yes. Build a Palace (level 1 or higher) in the village you want, open the Palace and choose "Make this village the capital". A Residence cannot do this, and a special village cannot become the capital. The former capital becomes a regular village, and any of its buildings above the level allowed outside the capital are lowered so that, counting an upgrade already in progress, they do not exceed that level. A building with an upgrade in progress can therefore drop below that level until the upgrade finishes.