After reaching Level 50 in Puzzle Quest 3, you unlock Citadels.
As you continue to play Puzzle Quest 3 and advance through completing the main story with a level 50 Hero, any XP earned afterwards from Battles will go towards your Citadel.
To view your Citadel Level as well as all of the possible upgrades, this can be viewed in the Tavern > Followers screen, above your list of Followers.
As you level up your Citadel, you will be given a choice of one of several bonuses across Offence, Defence or a Mastery Element. These bonuses are then applied to all of your Heroes.
In the example below, we are about to reach Level 1 in our Citadel. Starting with Offence, we have selected a 2% increase to Power, which will apply to all our Heroes.