Question, ... if an NPC or ship is in a terrain, can a city be built there? Or will the NPC or ship need to move before the city flats can be put down? Can't find anything about this in the rules.
4/ Blocking Construction
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Anything that exists within the construction site will be moved to your location, or not, according to the following rules. This only applies to when construction is beginning.
PCs & NPCs: Builder NPCs who are actively building a facility will not be moved
Ships & Vehicles: Are not moved if the pilot is an active player and set as the active pilot
Traveling Entities: An entity currently moving through the area of the construction site will block construction. Entities who will be moving through the construction site but who are not yet within the area will have their travel aborted.
Descending Entities: Will block construction until they have descended, at which point they will fall under the rules regarding Ships & Vehicles