You start it by talking to Chiyo at the sleeping chambers. It requires Chiyo to be level 25+ and that you have constructed the big farm in Central from the overview map. (The farm where you can release monstergirls)
Then you're missing a previous event with Chiyo. Did you have the events about gathering materials with her for alchemy? Did you advance the main story and have Varea at your castle or helped her in the events with Amagal?
What was the last event you had with Chiyo? What is her current dialog? It's hard to say what you need to do if I don't know where in her events you are. ;)
