The Gate of Heavenly Peace by Jonathan Spence — Not specifically about Taiyuan, but Spence's account of Chinese intellectuals and reformers from 1895 to 1980 gives essential background for understanding the political upheavals that shaped Shanxi and its provincial capital. Several of the figures Spence covers spent time in Taiyuan.
Shanxi Merchant Culture (various academic anthologies) — The phenomenon of the Shanxi merchants, who dominated Chinese long-distance trade from the 15th to the early 20th century and built the great courtyard compounds across the province, is documented in a body of Chinese and translated scholarship. The best single overview in English is scattered across journal articles, but any anthology on Ming-Qing commercial culture will include substantial Shanxi material.
The Man-Eating Myth by Marshall Sahlins — Not about China, but Sahlins's study of how false beliefs about distant peoples become settled historical fact is useful preparation for sorting the legendary history of Shanxi (the Yao emperor, the mythological origins of Jin) from the archaeological reality that is increasingly well-documented.
River Town by Peter Hessler — Hessler's memoir of living in a Sichuan town in the 1990s captures the texture of provincial Chinese life better than any book specifically about Shanxi. Reading it before or during a trip to Taiyuan is a preparation for the kind of place Shanxi's provincial capital actually is.