“And the city shall be devoted, it and all that is in it to YHWH.”
This would regularly happen to a first conquest. It was the firstfruits. The idea was that it became sacred to their God. Therefore all living things had to be put to death as ‘devoted' (cherem) to Him, while all possessions were separated to the treasury of God. Not a single living thing was to be spared. Not a single possession was to be appropriated to private use. All was YHWH's. Joshua interpreted all this so literally that he would even put a curse on anyone who in the future tried to rebuild the city itself (Joshua 6:26). One reason for this was as a symbolic act demonstrating the consequences of idolatry (Deuteronomy 13:10-17). Jericho here stood for the idolatry of the land.
The practise of ‘devoting' to a God was a common one. We can compare the words of the King of Moab on the Moabite stone, ‘And Chemosh said to me: "Go! Take Nebo against Israel." And I went by night and fought against it from break of dawn till noon. And I took it and slew all, seven thousand men, boys, women, girls, and pregnant women, because I had devoted it to Ashtar-Chemosh. And I took thence the altar-hearths of YHWH and I dragged them before Chemosh.” Note the use of ‘seven' with its implication of divine completeness, and the dual name of the god. Note also the reference to YHWH. ‘The altar-hearths of YHWH' suggests that this was a religious sanctuary which may well have been the reason why it was ‘devoted'.
“Only Rahab the harlot shall live, she and all who are with her in the house, because she hid the messengers that we sent.”
One exception was to be made. Rahab and her family, with their possessions, would be spared because of her assistance to the Israelite spies. Although ‘devoted' to YHWH she was redeemed by her actions in aiding YHWH's servants.