I had the same thing and it took me a bit to figure it out.
When you click on the dragon resource, after it is built, it should say what city it is linked to. When you select the create unit tab in that city, "Young Dragons" are an option. If you can build on it, it will link to a city. I just pulled a save game up and I was more than 5 spaces away and it worked fine.
Then, build like any other unit.
Keep in mind the upkeep on those things is very high, I barkrupted myself making a company of the things, each dragon cost 10 gold / turn, a company cost 120 a turn, I had to disband it.