Ah yes, this is something I thought was a good idea. In fact I might as well dump CS ideas here.
Basically, at the start of the game there are only a handful of city-states, no matter how many you selected to be present. However, barbarian encampments form into them in time, and the city-state they form into depends on certain conditions.
Maritime: The encampment must be along an ocean for a certain number of turns, based on a food threshold- they will develop faster if near more sources of Fish or so.
Mercantile: The encampment must be within range of luxuries, and the more present, the faster they develop.
Religious: The encampment must be exposed to Religious pressure. This poses a bit of an issue considering on a Terra map no Religious city-states would emerge in the New World, but maybe there could be other conditions- like being next to a Faith-producing wonder, for example.
Cultural: The encampment must be near a significant source of Tourism, the more, the faster. Same as above, except a bit more viable since other city-states could possibly produce a bit of Tourism of their own, so these would emerge near other city-states in the New World.
Militaristic: Obviously, the encampment must produce and have fielded a number of military units - it will go slower if you actively go and get rid of their units, but if a single barbarian encampment has six or seven units it produced on the map at once, it is likely to become a city-state. These would likely emerge in otherwise undesirable areas. Maybe another condition needs to be that they're near a Strategic resource, and maybe that has to do with how encampments can now produce units that require those.
Possible other types of city-states, like, Industrial or Scientific would likely have to do with proximity of Production or Food in the area.
And of course, they should be able to form nations. I do support city-states acquiring settlers, not as quickly as civs do, but slowly, maybe depending on era. If they make enough, and likely take over another city-state or two, they will be able to form a bona-fide nation, which can produce Great People and establish Trade Routes and whatnot. The nation they form into would depend on the city-state, Kiev would Ukraine, Vatican City would found the Papal States, Riga would found Latvia, Cahokia would found the Mississippi, and so on and so forth. They could even possibly have minor Unique Abilities, small things, like, the Philippines would gain Food from International Trade Routes, Argentina would gain Culture from Gold-producing buildings or something, Panama would gain bonuses for Trade Routes that pass through its territory, and so on. This may be a bit tricky considering there's city-states that share a nation, specifically Canada, Switzerland, Belgium, Malaysia, and then there's Wittenberg and Kyzyl and Hong Kong that make issues and all those assorted city-states in Italy and north of the Holy Lands, but eh, those can be worked out.
Here's another thought - city-states that DO emerge into civs later on, via other civs being wiped out. So the capitals of all not present civs would emerge as city-states, you could run into the city-state of Washington or Palenque or Madrid or Moscow or Kyoto or what have you, but they wouldn't form into a civ unless another civ is completely eradicated from the map, and even then they'd take some time to form. What kind of city-state they are depends on the civ- Ulundi would be Militaristic, while Addis Ababa would be Religious, and Paris would be Cultural. This would certainly add a bit more dynamic emergence of world players throughout the game, as you could start with one set of nations and end the game with an entirely new one. Of course, this throws complications into a Domination victory...but you know, I do feel like that should be a bit more comprehensive anyway, requiring you to conquer most, if not all of the world.
But regardless, this would lead to map space filling up with city-states as the game went on, regardless of desirability of the land, and on Terra maps especially, with smaller nations and even behind full-blown civs present on there as time goes on.
