The most obvious thing i can think of is that the higher up the difficulty level, the less the AI has to pay on unit cost, supply and upgrade. For example, at Emperor, the AI pays only 85% of the upkeep, 20% of the supply and 15% of the upgrade cost that a human player pays. Less upkeep means more units, less supply means those units don't have to be kept at home and less upgrade cost means more current units. Then the AI needs something to do with all those units, and that of course means war. The AI also gets a lot less war weariness (only 50% at emperor), which encourages it even more to declare war with all those units it made.
In fact, i think i'll try to tweak these values to see if i can get more aggressive AI players. This would make the game more challenging and more entertaining for a warmonger such as myself. Maybe with 0 cost on all the above, and 0 war weariness, the AI will get interesting! Or i could just turn on "agressive AI". Does anybody know if this option restricts you in which leaders you can expect to meet (i don't want that) or make whatever leader you do meet more aggressive than he/she would otherwise be (more interesting to me)?
Edit : typo.