Deception is increased when people think there could be a dragon (running out in fear. Getting killed) and lowered when they discover there is no dragon (escaping after fully exploring)
The deception level only adds more tribute from villages. The concept was that it would also send stronger adventurers. And that you would need to maintain your deception for enough income.
During development I found that I did not have time to properly convey this to the player. Nor to ballance it properly. So I just made sure is was simple enough and you could always progress.
First time I made a stratergy game like this. So it was an interresting experience.