In Knight, it is the most important part to contribution is that it helps your town gain new units. The amount of contribution points gathered in the Crusades determines what your town will get.
There seems to be a way, by talking to the City Hall Officer, you can somehow teleport directly into the enemy town if their Magic Generator is destroyed. This is called Invasion, during an invasion, if your own town decides to summon a meteor storm to attack the other town, you will be damaged. It should be noted the the Magic Generator is extremly hard to destroy.