Rules for Lego Castle War provided by 'Castle Only' at Bricklink.com

Items required:
A whole lot of base plates and Lego(R) bricks to generate scenery.
10 minifigs per player, separated into armies.
This can be done easily by just giving them different colored pants, or matching all of their vests into four categories, such as:
{forestmen with green legs, crusaders with black legs, eagle knights with blue legs, dragon knights with red legs}
or any such arrangement. I prefer to use the one mentioned in the example when playing with four players.

7 flags per player. These should be color-coded, one color per player.
Such as: {green for forestmen, white for crusaders, blue for eagles, red for dragon knights}

You will need a huge pile of:
Horses, swords, bows, spears, axes, crossbows, massive axes, saddles, beards, and treasure chests.
If you don’t have enough, there is then a “limit” on the number that can be purchased, or you may substitute homemade items.

Lots of gold pieces or doubloons.
Each of these Lego pieces will represent “TEN UNITS” of gold.
So, if you have 3 gold chips, it equals 30 gold.

Finally, you need a deck of 52 cards and a couple dice.

Weapons … here are the cost of the items and their power.
sword:
10 gold
+1 attack, range 1

bow: 30 gold
+2 attack, range 3

spear: 30 gold
+2 attack, range 2

axe: 20 gold
+2 attack, range 1

crossbow: 20 gold
+1 attack, range 3

massive axe: 30 gold
+3 attack, range 1

Defense Items:
shield: 20 gold
+2 defense

armor: 20 gold
+2 defense

helmet: 10 gold
+1 defense

Special Items:
horse: 50 gold
+2 speed
+1 defense
+1 attack

saddle: 10 gold
+2 holders
requires horse

Treasure Chest: 10 gold
allows bearer to carry as much gold as he wants with him

beard (old and wise): 30 gold 
+1 attack
+1 defense
Cannot be worn with armor.

Battle Area:

Now, create a huge landscape out of Lego base plates, trees, etc.
Divide it into approximately NINE spaces per 32x32 plate.
You can use fences, plants, or bricks to separate the spaces.
You can even make some dead ends or barricades… the land can look however you want.
Just make sure there are separately marked, clear ‘spaces’ large enough to hold a couple Lego guys (approx 10x10 pegs.)

Next, convert approximately 5 percent of the spaces into “Castles” by adding a wall of TWO-THREE bricks high around them.
It shouldn’t be so high that you can’t see the ground, though!
Make some entrances into the castle, but probably not one on each side!
Generally, 2 to 3 is a good number.
Place a flag pole (black pole) on each castle, but no flag.
Choose certain castles to be “starting points” depending on the number of players.
Players’ starting castles should be as far away from one another as possible. Here is an example of such a landscape:

legowar

Beginning of the game:

Place one of your characters in your starting (“HOME”) castle.
Roll to see who goes first.

On your Turn:
Choose a card from the deck of 52 cards.
IF you choose a 9, 10, J, Q, K, or A, then place one of your characters in ANY castle you own!
Place 10 gold in each castle you own.
Move any TWO of your people at most 2 squares, but only horizontally or vertically. If they are on a horse, they may move 4 squares.
You may not move onto or through a square occupied by a person of another army. 
Each person may carry TWO items with them.  They may wear only one helmet, one breastplate/beard, and ride at most one horse.
Each one of your people may then attack a neighboring square, providing it is within range of their weapon.
They may attack only once per person.

Battle:
Attacker and Defender each roll a die.
Then use the following formula to calculate their total power: die x skill.
If the attacker wins, the defender is removed from the board, as well as any shield, armor, beard, or helmet he is wearing.
His weapons remain on the board.  The attacker then gets a "FREE" move and can move into the square that he attacked IF the square was adjacent to him and IF there are no defenders left on the square.
If the defender wins, nothing happens.
Examples:
# 1
base attack skill (ex: 3) * dice roll (ex: 4) = 12
base defense skill (ex: 4) * dice roll (ex: 4) = 16
defender wins by 4; nothing happens

# 2
base attack skill (ex: 3) * dice roll (ex: 4) = 12
base defense skill (ex: 4) * dice roll (ex: 3) = 9
attacker wins by 3.
defender dies: weapons lie on square, shield/helmet/armor removed from board
Bonus:
If the defender rolls a six, the attacker loses his attack weapon, regardless of who won the fight. 
The weapon is returned to out of play.

Castles:
Upon entering an undefended castle, you may place your color flag on the pole, claiming it as your own.
It will generate 10 gold per turn.
Also, if a person in a castle is attacked, they get +1 defense skill. 

You may not own more than seven castles, nor may you own more than 10 people.
If you acquire an eighth castle you cannot put a flag on it unless you take a flag off another castle.
If you acquire an 11th person, you cannot take it at all.

Winning the game:
The game is won when only one player remains.
Players can resign at any time.
If they lose all of their castles, they automatically lose the game and must resign.