When you first liberate a location, the inhabitants will still be suspicious of your actions. Over time, they will begin to trust you and their loyalty will gradually grow.
Loyalty increases over time as long you can retain the area. Also, liberating areas near each other will have a positive effect on loyalty as the inhabitants can verify your commitment to their cause.
This should provide a big motivation to take over as many areas as possible because each one you liberate will affect its neighbors.
For a mathematical equivalent, loyalty increases by +40 when you free a region and it goes up by+ 4 for each day you hold the location. On the opposite end, you get -60 if you lose that area to the enemy and -6 for each day they control the once-freed location.
There are two very good reasons to increase loyalty in each area: money and militia. The amount of money you earn from an area is directly tied to its loyalty.
However, proximity to other areas is also a factor in overall income. Still, in a simple sense, 100% loyalty translates to earning the maximum amount of money you can earn from that location.
Loyalty will naturally increase over time, but there is a distinct advantage to liberating areas around some of the some of the big moneymakers, such as the mines.
The faster you can raise the loyalty of those rich spots, the more cash you will have at your disposal. Of course, that will also make it a pretty attractive target for enemy squads.