The Observation Post is the Gunpowder Age upgrade of the Lookout and serves the same purpose: It lifts the fog of war within a reasonable long range, making it an important early warning system. It also detects invisible units (such as Spies) within its line of sight.
Compared to the Lookout, it comes with an additional 40 hit points and a significant increase in building cost, while all other stats remain the same: It is still a fragile structure as it has no armor and cannot attack ground units. It does have the ability to attack enemy air units by shooting arrows at them, however, it's the same fairly weak, low-ranged attack it's predecessor has.
In the Industrial Age all Observation Posts automatically upgrade to Air Defense Guns immediately and for free. This greatly improves their ability to combat the upcoming aircraft while retaining their surveillance functionality.
- Observation Posts serve the same purpose as Lookouts did before - deploy them near Cities, Wonders, Forts, important rare resources, and possible attack routes to spot enemy units early.
- Obervation Posts automatically upgrade to stationary Air Defenses in the Industrial Age, providing an immediate defense against enemy air raids.
- Computer players usually don't build many of these, as they have omniscience and don't need them to spot your units. This, however, usually makes them somewhat vulnerable to Spies.
- Sometimes, placing observation posts around your trade routes can be beneficial as enemies nations may use them to follow caravans and inflict damage later on.