Will this apply to aqueducts in general, or will it be gated behind what our current population is?
Colonies were originally described as figuring out how to live in an area in addition to securing its land and resources, where as trade posts are more for trading with people. It could certainly be either, since trade posts are more comfortable to make at a great distance, but I'm leaning towards colony. We'll see next turn.
Something that a lot of people should keep in mind is that this isn't a list of priorities, it's a list of how much various departments consider things they want to do important.
The Dam? It's one of those things that will do massive benefits for gardening. Probably the biggest thing that could be done, so the department of gardening really wants it.
The Palace? Well, considering it makes centralized government immensely easier, the department of administration is basically grabbing the king and shaking him saying, 'you don't understand. We need this.'
In general, it's meant to act as a thought experiment to get inside of the various needs the people have and allow the players to prioritize them based off of that.