Castle transformations can take on a variety of forms, but there are a few major thorough-lines. Silos, which can be purchased for Nook Miles, are a popular decoration, as they lend themselves readily to that castle tower look. The top image in this post, for instance, shows creator PixelPark777 attaching silos to their house to make it look like a pink castle, which matches their cute Princess Peach costume.
Cobblestone, along with iron and stone fences, both rein supreme within this trend as well. Some Animal Crossing fans spruce up their castles up with moats, hedge mazes, banners, and plenty of statues to sell the idea of a courtyard or elegant exterior. Others put up the obligatory armor and throne rooms, if not cells and barracks. At least one creator covered by YouTube channel Chase Crossing went all out and put together a fossil display that looks like a wyvern:
The island even has Knox and Sterling, the two bird knight villagers, roaming the castle grounds. You can view the full island tour here.
Here are some of our favorite castle designs from the Animal Crossing community: