Two quick questions;

1) Are you allowed to build developments in burned down areas of the Capital?

2) Target Unit: when a card allows you to redirect damage to another 'target unit' does that mean only units you own ie if you are defending, only units that are also defending in the same area?

1) you could but not much point with it already being burned

2) any eligible target, which will vary depending on the card/action.

Well, you can play cards as developments to benefit from some bonuses, even though the Zone where they're playes is burning already. Think about Troll Slayers, Armoury and Forgotten Cemetery.

I know, and I would if it was my battlefield that was burning and I had Troll Slayers there.

I'm thinking of the Spell that allows you to turn a development into a unit with two hammers and two hit points. It is a way to get some hammers into the battefield quickly.