Place walls to protect your own buildings against ground attacks. A single wall only costs 150 lumber, but will not last long. Upgrading one section of the wall costs 800 lumber. Start by creating a basic wall around your entire city. Then, surround your most valuable structures, such as the castle, with a level 2 wall. Save the rest of your lumber for defenses that are effective against dragons. Use Troll Towers and Drakecapults for defense, as well as Goblin Silos. They will fire off ranged missiles that do large amounts of damage to dragons and ground units. However they take some time to reload.