In Colonization, much of your population is made of Free Colonists. However, when placed in a settlement, these colonists, as well as indentured servants, converted natives, and others, can take on any role available. That is, colonists can take up one of the various professions in a settlement, from harvesting raw resources in nearby tiles to working in one of the many buildings that convert raw materials to finished goods. Thus, there is a lot of flexibility in assigning roles to your colonists: one minute they can be focusing on mining silver from nearby mountains, and another minute they can distill sugar into rum.
With the right resources, these ordinary colonists can be turned into soldiers or dragoons to fight off the enemy, be it Europe or natives. If a settlement has enough Guns resources (and potentially Horses, too, if you want to form a dragoon), you can convert previously-hard working colonists into soldiers in an instant. To change the profession of any colonist while in the settlement screen, simply double-click the worker's icon and choose from the list of options. Alternatively, you can drag-and-drop the colonist from one area of the screen to another.
Note: There are 30 professions available, all listed below, and the table is accurate as of Colonization v1.00.