You message back to the priests
Military: You should go and investigate where they are coming from, maybe even try to capture a few.
Government: the priests, mages, and inventors will be the leaders of the town. Each will be distinctly dressed to show their rank. Though all citizens are equal in law and in rights, these citizens will be the leaders.
Citizens: Wear whatever is comfortable and nice, that allows for safety in emergency. Keep your morals in line of science being the answer but also accepting that there should be fun and happiness in life.
The priests respond with their acceptance of the messages and return to the town.
End of year five: The people develope a comfortable and quick clothing style. Wearing things like t-shits and cargo pants to hold their tools. Their morals are a bit wide and verried from person to person as not all of them interpret what the priests say the same. Though crime and violence is fairly low. The government is set up with the mages, those who are the most adept at magistry but not in the priest hood take roll as the cities protectors and hold/enforce the laws of the town. The inventors become the law makers and the public works managers, they make few laws but those they make hold a heavy hand of law behind them, their laws are meant to be interpreted and not be immediate as not all crime should be judged the same, they are the largest branch but hold the least sway in votes per memeber. Final the priests, they are the judges, they are the smallest group but hold the most power per vote per person, they consist of the high priests and their 4th year and higher apprentices.
The military has gone to the hills searching for the source of the undead and set up cage traps along recent attacks areas. They have captured two undead, one person, and one raccoon. They also find an area with a rather large hotspot of activity but of the three scouts sent in, none have returned.
The priests come to you again at the end of the year to ask of you favors.
Military: We ask for you to grant an immunity to this disease that has taken some of our people so we may scout the undead better without loss, or maybe you could seek the god whom governs these undead.
Government: We ask for what way should the towns economy be handled? Should we dispense money for the people to use and collect a portion to find ourselves or should we control the businesses and pay everyone in tokens which can be used to buy specific things at the stores we run?
People: There are some who take the term 'comfortable' too far! They dress provacotivly and steal the gaze of lovers and dirty the minds of the children, what should we do with these people?