In order to conquer a rogue town you must get it's happiness down to 0. This is done with successful attacks. If you lose the attack, the happiness will not go down.
Conquered rogue towns will start with all the buildings at the lvl of the town you conquered. You will get a town center, 19 cottages, 2 mines, 2 logging camps, 2 quarries, 4 + 3x farms (where x is the lvl of the rogue town), a watchtower, blacksmith, tavern, great hall, chancery, workshop, barracks, stable, scout tower, march site, waystation, academy, and walls all at the lvl of the rogue town! That will save a LOT of time and resources!!
See the thread on
Farming Rogue Cities for info on attacking lower lvl towns without losing any troops.
I have conquered a couple lvl 7 towns by throwing gobs of militia at it. I'll send 80k militia in the first wave (30-40k will die). Only about 25% of the enemy troops/defenses will regenerate, so my next waves will be successively smaller. 30k, 20k, 10k, then the rest will all be 5k militia.
It will take 25+ successful attacks to conquer a lvl 7 town. Each win drops the happiness by 5, and it regenerates 1/minute.
*You will need to space out the waves. I like the waves to land a full minute apart. If they are too close together, you will run the risk of the town resetting all its defenses to their starting amounts! This will happen if you get any of the defenses down to 0. The town will automatically regenerate some defenses and army every minute, so space out the attacks accordingly.
If you are attacking a lower lvl town, you will lower the happiness faster. A lvl 1 town might lose 15+ happiness per attack. A lvl 10 town only loses 4/attack. If you space the attacks at 1/minute, a lvl 10 town would need about 35 victories to conquer (be prepared to lose over 400k units before your first victory)