Responses
I think the priest and chief told the lords or rich families that their sons and daughters can meet the dragon and become his servants if they support the priest and chief. They want to buy their loyalty. The news then spreads to the villagers.
I wonder who's the culprit behind the rumors. There cannot be smoke without fire, after all. Could have it been Sol, trying to get Brian to form a covenant with him through means that are less than straightforward? Hmm. . . .