Id like to compare this little situation to the "Civilization" game. Sure you can basically murder every other smaller and less developed nation straight at the middle of the game and make alliance with a nation that is equal to yours, but that just leaves you picking your nose and clicking next turn till the end of the game. Sure you can get more resources and shit when you annhiliate everything in your path, but whats the point when you pretty much kicked all who to wave those awesome things at out of the game. Same in strat.
More players = more fun. Start beating people out of the game and you have noone to wave your successes and hard work at( I know some people care about that), exept your clanmates, but even they will be all like "cool story bro".
I think the huge problem here is that there isnt much variety in strat. Nothing exept declare wars and trade. And as I heard trading is kinda ruined factor. Id suggest things like bounties, player bountyhunters, player monks who convert religions, creating civil unrests in tiefs, spies. Strat leveling like for spying, spreading religion, leadership, trade etc etc . Things are just too stable in tiefs and player parties. Get a tief, watch out for large armies....profit till then. Players got nothing to do but just bot in villages or move to conqure. Cant blame them for just fighting all the time.