Look here:

http://forums.civfanatics.com/showthread.php?s=&postid=1017042#post1017042

If this works as I am speculating it might in the above thread, it could wreck a GOTM if things fell into place for some, ah, unscruplous player like me. So, Cracker, whether it works or not, and I have not tested it, please ban it and spare me the temptation.

originally posted by KingEd
3) Units from a city donated to other civilization are also "teleported" to the capital.
originally posted by Itcoljt
Say you are playing a two continent game and you just finish taking your starting piece of rock, say early industrial age. You have your main railroad transport lines in, and scads of cavalry but you have only a couple of galleons. Take a leader you were saving and put him in a galleon with a settler and a few defensive units. Land on the other continent and settle the next turn, jumping the palace with a leader. Now go back to your homeland and move all of your military units (except a few) by rail into a small town and gift it to an AI civ. You then have your entire army transported onto the enemy AI's continent without having to take the time to build transports, load them up and send them over. Next turn you use the last of the homeland units to retake the city you gifted.

If this works, its clearly an exploit that should be banned from GotM, but thats only my opinion. Going to go and test this now.

Tested it and it worked.
Had a 2 continent game with one city and a leader in the 'new' continent. Rushbuilt palace there, gathered masses of units in a city in 'old' continent.
Next turn, palace was built, city with masses of units was donated to other civ and voilá, all units were now at the new capital and on top of that, ready to move in the same turn :)

Exploit with perhaps some limited uses, especially before airports. Saves the resources of building ships and the time of ferrying all those units into the new continent (especially if the new continent is very far away)

Ofcourse, you'll lose the palace benefit in the old continent, but hey, you might have FP near your capital, so it wont hurt so much.

And besides, you already have all the units you need for conquest now in the new continent, so who cares if the old country is a bit corrupted.

Originally posted by cracker
Meisier, No, the immobile defenders cannot load onto ships. They are IMMOBILE except under one extremely rare condition that most players will have no great value in knowing. Let's move on from this subject of trying to think of the most dysfunctional and exploitive uses for the bonuses in the game and do our best to find ways to try and keep you alive into the middle ages.

Congrats, you've found the "dysfunctional exploit". ;)

If someone wants to waste a leader and relocate the capital to the middle of nowhere, I say let them do it. Transport chaining is far more powerful anyway.

Well Dave, we don't agree.

Hopefully Cracker will rule on this.

I also knew about this for half an year. I never thought of using it as an exploit, and I think it's pretty rare to get in a position to do it.
Nevertheless it's an exploit that should be outruled either explicitly or informally.

We have known about this exploit for well over a year and it is a designed into the game feature.

Somewhere in the past I have posted about how this "feature" can be used to "beam" hordes of workers and settlers around the map since workers and settlers cannot be airlifted.

I am pretty sure this is not a game breaking exploit and by the time it can be used with great effect the essential factors in the game score will be set.

I have no problem with not chasing this issue but we will have the staff watch for it if any new information comes up.

For now it would be classified in the "something to do to keep one's self busy" category.

Okay Boss, its in. Maybe some game I will be in position to prove it should not be.

I have certainly not thought of this before. Maybe you guys are right about it not being an issue. We shall see what we shall see.

I am constantly amazed at the creativity of the strategies/exploits people come up with. I never would have thought of this palace/give a city to the AI thing. It seems like it would only work in pretty rare situations but still it would be fun to give it a try sometime if the situation arose. I never seem to have enough transports for a fast intercontinental blitz... of course I never seem to have an "extra" leader around either to use in this exploit.