Yeah, no.
The problem is that too many are way too friendly towards each other, for no apparent reason due to the current game-play. Having an alliance, or friends should not be an easy side-thing in Strategus, it needs to be a decision that has benefits and consequences, not just benefits. Medieval style!
Making things more local is indeed the right move, if there's far between everyone there's a way better chance of a proper working Strat world for all ways of playing it - Unless a large group predetermine to go to the same place, hence IMO why more installments would be needed, such as dividing all areas into zones where who ever has most land in the Zone is the 'King' of the zone, making everyone else in that zone his subjects, with no exceptions, no one is equal, let's throw some taxes and what not on top too. These zones would need to be very large though so that if you can make a claim for a zone, it would still be a hard task to do and maintain.
I want loads of random bandit attacks, neutrals running around, raids what not going on. Full scale war shouldn't just be something you just do instantly or randomly whenever, especially not ones that take up most of the map in terms of action - not that any Strat round should go without some big ass wars of course, I'm not saying we shouldn't have full scale wars, they need to be there of course, but there's many other aspects to the game that can coexist, all we need is a few damn reasons, at the moment there's no reason not to be in a huge friendship circle, if one wishes to be, at least there should be consequences then, to ensure proper game-play.