As you near the end of the Sorcerers and Dragons chapter, there are a few things that you can do to prepare your city for the Halflings.
OPTIMIZE YOUR SPACE
It is necessary between just about every chapter to do a re-evaluation of your layout and look for space optimization opportunities.
Preparing for the Halflings is no different. Take a look at the layout suggestions to get an idea of the type of area you'll want to leave room for. The good news is, a nicely shaped area fits very naturally into your city if you re-arrange to align your residences in columns vs. rows.
If you're like many players, you may not have had much room to be very neat or tidy as you worked through fitting in the Campus and Faculties and upgrading residences last chapter.
Take the opportunity after you sell off your campus settlement and while you work on the first few researches to optimize as well as possible.
Make sure you leave room for your Trader to grow! It grows to 4x5 for both races.
MANA OH MANA!
How much Mana are you producing? You'll need a lot for the Halflings chapter. Build up a nice stockpile if you can. Switching to the updated roads is nice, but it is very expensive in Mana. If you don't have a long while between chapters, you may or may not decide that the Mana cost is worth it to you.
If you haven't already changed most of your Willows to Libraries, you might consider holding off and waiting until you unlock Grape Farm. It is available relatively early in the chapter and is worth slightly higher culture than the Libraries
The Mana output isn't much better for Grape Farm, in fact, it is exactly the same per hour.
The better Mana producer for you might come down to how often you play.
The Arcane Library has a maximum accrual time of 12 hours, and the Grape Farm has a maximum accrual time of 18 hours. The Grape Farm can only be collected each 9 hours, but the Arcane Library can be collected every 3.
If you want to collect more faster, consider upgrading most of your Willows to Libraries and sticking with quite a few.
If you don't play often enough for more frequent collections to be of much benefit, you may prefer to hold off until, or still switch your Libraries to more Grape Farms.
You will need a LOT of supplies for the first early researches in the Halflings chapter. Stock up on plenty of Power of Provision and Ensorcelled Endowment spells.
You'll get a nice boost to both your coins and supplies after selling of your settlement, but it's easy to use up quite quickly.