The "population limit" in "Age of Empires II" is a limit on how many new buildings, workers and soldiers you can create at a specific time. This is part of the strategy of the game -- you cannot immediately create an unlimited amount of units until the area that you're building can sustain these numbers. You can increase the population limit in "Age of Empires II" by building a very specific structure.
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Click on a peasant. In "Age of Empires II," peasants are units that have the ability to build structures.
Click on the "House" option. This will tell your peasant that you want to build a house.
Click on your territory map at the location where you want your peasant to build a house. The peasant will begin to build and, when completed, your population limit will be increased. When you reach the limit again, build another house to keep expanding your empire.
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