What is Iron used for in Dragonfire?

Iron (produced by the Foundry) is the most "military" of the four resources. It mainly serves:

• Military equipment
• Elite troops (the stronger units cost Iron)

So it's the resource to watch when you want to strengthen the quality of your armies, not just their quantity.

Conversely, Wood and Stone mostly go into building construction, and Food/Grain into maintaining your armies.

Like all base resources, Iron resets every Reign. If you're going for elite troops, do it during the Reign you need them, not in advance.