I find the Ljosalfar to be quite OP under AI government and I'd like to ban them :D. Doesn't FF have that option? Could it be imported?

Personally I'd like to ban the Illians, so that you can play with no AC and no Illians trying to destroy the world either.

You can do that by changing <AIPlayable>1</AIPlayable> to 0 in Assets/Civilizations/CIV4CivilizationInfo.xml for each civilization you don't want the AI to be able to play with. You would have to undo it every time you want to reenable it though.