After a bit of unrelated searching, I found this on the Steam forums' FAQ:
Q: How do I build a house for the
NPCs? A: Houses need to fulfill a set
of requirements to be considered a
proper house. The step-by-step guide
to making a house is as follows:
-Build the walls and roof. The room must be five tiles tall at the least,
not counting the roof itself.
Additionally, the room must not share
a wall with any other house. You can
circumvent this by building
two-tile-thick walls seperating each
Make sure the room is big
enough to be considered a proper house
-Fill in the house with background walls. Wooden walls are recommended,
but stone walls work too. Make sure
everything's covered up.
-Place a light source inside the room. A torch on the wall works fine, but
you can also use candles and other
such fancy items. You can make said
fancy decorations with metals at an
-Place a Wooden Table and at least one Wooden Chair in the house.
-Place a Door in the house, in one of the walls.
Assuming you've done everything right,
the game should treat your room as a
house. The first house you build will
be taken by the Guide, and any further
houses by whichever NPCs appear. Six
houses in total are enough in the
It appears there is a size limit, and (this is the issue I am having) the first house you build will never get NPCS because the guide decides to live there.