Conquering Calradia is a somewhat ambiguous goal as the first Mount&Blade games were open-ended "sandbox" games, so there is no winning condition. The most obvious goal, therefore, is complete dominance over Calradia. This is achieved by eliminating all the other Factions. A faction will be eliminated when you capture all of their castles and towns. Usually the faction will linger around for a while with their lords possessing very small parties. These can be a nuisance, as their small party size allow them to quickly run away from you when you approach, enabling them to raid all of your villages with minimal threat.