So lots of stuff happening and changing. As you may know, at first prisoners and servants were 2 completely separate entities. Reasoning behind that was pretty vague and mostly related to how residents would mostly do anything you tell them, and prisoners would have to be disciplined first. Now, with new 'disciplining' system I don't feel like this is necessary and I redid most of it. You would be able to put residents into prison and vice-versa, and residents will be able to try escaping or refuse to work, so you will have to pay attention to their behavior.
Now it's reasonable to raise a question, how exactly slavery holds in the fairly open world? With this I introduce new concept and mechanic : Magical branding.
Magical branding is one of the oldest and most common spells currently used. The procedure of applying one is relatively simple, and only requires the Brander to put their hands around the neck of the one to be branded, as if to strangle them when applying this spell. This allows for the Brander’s blood to be enchanted and infused onto the Branded. As a result, barely visible symbols appear on the neck of the Branded, coiling around and allowing them to be returned to their owner if necessary. The entire procedure is relatively painful for those branded though, as their body is being affected by foreign biology.
Branding is the first thing anyone would want to do to their new human property; and it is expected to be done, as branded people are universally recognized as slaves. Not only that, but branding provides very important measures against rebellion, as a Branded person will not be able to inflict any sort of harm on the Brander. The spell prevents any actions influenced by such thoughts and causes paralysis by blocking signals to the spinal cord and inflicting pain and nausea in return.
Recognition of a brand makes it a decent measure against escape attempts, as branded people, while not usually returned to their masters if found far away, quickly end up in very bad conditions; exploited by commoners or taken by local governments to occupy dangerous and unpleasant jobs. Being branded basically lowers a person's rights to that of an object to be used.
Magical branding was most likely developed by elvenkind. Long ago, their magical powers allowed them to control some of the fiercest creatures thanks to this technique. In modern times, its use has become a part of everyday life, as apparently human beings can be easily subdued by their equals.
There's 3 ways to remove a brand. First, the owner can perform a simple spell, clearing the Branded of their influence if they find that they need to do so. Secondly, the brand will disappear if the Brander happens to die. Lastly, there's the option of dispelling a brand by very skilled mages, although this is generally prohibited by law, and one would be challenged to find a person who would be willing to risk performing such ritual. Needless to say, normal branding is impossible if the living being has already been branded as current brand prevents it.
Magical branding will be your primal way to establish ownership over a new prisoner, but will cost you some mana, prisoner's health and stress. If you don't want to brand someone, that is fine, but unbranded servants will have far more temptation to escape.