A chapel can be built to increase the happiness of the citizens that live around it, as well as happiness to the citizens that are members of chapel. Only 200 citizens may be a member of chapel, so as a town grows, more chapels may be needed.
Chapels must be staffed by a cleric for it to be effective.
Clicking on the chapel will show how many citizens are members of the chapel.
Clicking on the work button will toggle enabling or disabling use of the chapel. If work is not occurring, no citizens will be allowed to be members of the chapel, and people living nearby won't get happiness bonus.