"Strong walls that keep the colony defended from nearby enemies."
If you want to upgrade your defenses and need some wood, you can demolish your old Wood Walls, getting 2 Wood and 5 Gold back for each, therefore costing you 5 gold more per wall, but providing valuable wood.
The maximum amount of walls directly adjacent is 2, or 3 horizontally/vertically, otherwise the error message "Too many walls in the same area. Three rows of walls are not allowed" appears. You can instead build 2 rows of walls, with 1 open row between them.
It can be build directly or upgraded from a Wood Wall.
The fastest way to build a Stone Wall is to build a Wood Wall first then upgrade it, saving 4 seconds of build time. This unfortunately increases the cost by 3 wood.