Huts are very useful for followers. The breeding and upgrade rate is dependent on the number of followers you have in it: the more followers you have, the faster it gets.

 

When hovering over huts to see how many followers are in it, there's two bars on the left (green and red). The green bar indicates how much progress there is for creating another brave. The red bar indicates the progress on upgrading the hut to the next stage.

 

Huts can only be built by braves, and 3 wood piles are needed to build one completly. Once you have finished building a hut, you have a level 1 hut (small hut) - three units can get inside of it.

Later on, the hut will upgrade to level 2 (medium hut): this means four units can get inside, and the hut is upgraded with extra wood. The green bar is faster in a level 2 hut than in a level 1 hut, meaning braves might be born faster.

Once the upgrading bar (red bar) reaches the top of a level 2 hut, braves will look for extra wood to upgrade it to a level 3 hut (large hut): five units can get inside, and braves are born quicker than in the other levels, but there is no more upgrades to this hut.

 

Huts will be completly destroyed by a good direct tornado.

Will take 5 direct blasts to destroy 1 wood pile of a hut (or any building, for that matter). This means it will take 15 blasts to completly destroy a level 1 hut.

Firewarriors placed in huts may fire out of it when enemies aproach the hut.

Your shaman can cast spells when inside the hut, too.

Huts are the most important building in the game. The more huts, the more brave production. The more braves, the more mana/troops. It's just logic.