Was going to reply to another thread, but this is too long for a reply... 
I have an idea that goes along the lines of the OP.
http://forums.civfanatics.com/showthread.php?t=345938
Basically, do away with the settler. I know, I know, it is practically the core of the franchise.
Think about how population expansion happens in real life, and how it happened throughout history.
When the Oregon trail was in full swing, did we have large settler units that moved out and founded cities in strategic places? Not really. A wagon here or there, maybe even a dozen of them in some cases.
What we really had was vast numbers of unorganized people flowing out of cities and settling where they thought they could make a profitable living. Often they formed near already established trading posts, forts, etc. From which, cities began to emerge. These citizens were up in the mountains looking for gold. Mining towns emerged. They were forming religious conclaves in Utah, cities naturally emerged. They were quickly forming ports(vastly aided by government funding and organizing, which made the cities appear and grow that much faster) on the west coast that rapidly became some of the US's largest, most prosperous cities.
The same is generally true for most other civlizations. No one goes out with a flag, and says here is a city. They say, I could put a house and farm here, and other people eventually settle near them. Eventually, they go from farm, to village, and finally a city.
Vast numbers of people simply don't venture out in unison to found new cities. That is alpha centauri stuff.
Populations flow out to economically viable regions. And the cities form from the chaos so to speak.
So, how do we replicate this in Civ 5?
Basically, we make the worker into the dynamic for city building. Lets call them citizen units. They start out as normal worker/citizens but over history they can become specialists. I will discuss that later.
You start out in your capital. Lets say it starts as a level 1-3 with 2 citizen units. A city's population is all contained inside the original square and any that it expands into over time(multi-tile cities to make for metropolises and megalopolises at certain population densities later in the game). Anytime you have more than 1 population, you can spend a couple turns to push out a citizen unit which lowers the city population by 1.
This citizen unit can basically set down on a workable tile, anywhere it can walk to. When it does, that tile has an effective population of 1, or more if it turns into a village/town. However, the further it is away from your city, the less your empire benefits from it's product, be that food, resources, etc. Tech/road dependant of course. No upper range limit, but basically a scaling softcap.
So you spend the first bit of the game developing your capital and harvesting the resources near to it.
Culture doesn't limit where your citizen units can plant, but it does factor into claiming land for your citizens which is vital. It isn't a hard barrier to growth, but it will largely determine whether or not you go to war over a small piece of land. IE most civs won't war over a tile that has been in your culture for centuries, but if your citizens go outside the borders, they might be more likely to claim it for themselves or dispute it.
Ok, so you have a couple citizen units planted near your capital, either as farmers, or miners, or whatever. They learn quick and in flows their output. What about new cities?
Outside of a certain area, lets call it a soft city radius, your citizen units will try and band together to form cities once they reach a critical mass. Or, you can subsidize it with forts(major contributor to city creation in the ancient world since peasants would gather around them for trade and safety), gold, and forced immigration(throwing lots of citizens into an area makes it happen faster).
Once the area of citizens reaches a certain level of commerce or production(maybe even 1 citizen has had enough time alone to turn into a village and now wants to step up), you get an event prompt that asks you which local tile you want to place the city hall for the new city.
Bam, you have a new city that can start growing and furthering your empire. At the same time, you can have citizen units all over the place pouring resources into your empire, however inefficiently(if they are far from a city).
Further along in the game, new tech brings new citizen units. Most citizen units, given enough time on a tile, will get better and better, becoming experts giving bonuses to production of whatever they are doing on that tile(you would have lots of options on any given tile; mine, farm, raise sheep, gather lumber, etc).
New tech however, would let you produce say a miner citizen, whose sole purpose in life is to find a good hill or resource spot and gather as much as possible(more than a basic citizen unit).
You throw enough miners out into the vast wilderness and they will form a mining town(city) sooner or later. The mining town classification would be important because it would boost the production of local mines. Synergies and all that. Same for other towns that are generally focused on one industry. If you have 5 citizens working a coastal area for fish and what not you can pretty much expect the city resulting from that to provide an excellent source of seafood for your empire.
Bonus for specialization.
Once a city forms near your citizens, inefficiencies mostly go away. Now you have inefficiencies getting those products to other cities(again reduced by techs, roads, etc), but everything local is now focused by a local government.
Later in the game, you get access to corporate units that would travel great distances to exploit resources. Company towns form up around those exploited tiles.
You could even have hippy citizens all move out to an area in the wilderness and set up a special hippy commune that might form a city and provide benefits not seen with normal cities.
Engineer citizens building the Hoover damn, out materializes Boulder Colorado from all the furious construction and activity.
If you go out with your warriors and conquer some lands and place a fort(built and garrisoned by your soldiers) in some key, strategic location, then eventually(the more trade passing through the quicker) a city forms on or around that fort.
The possibilities are numerous.
Another thing this does is make those citizen improvements important, because if one gets razed now, you actually loose a population which is going to make the surrounding area unhappy.
Paths come automatically with a basic citizen unit, so if 3 citizen units are farming it up in a line from your capital, you have a worn path. Later units would come equipped with roads. They could build them too, as well as your warriors.
Cities also get a new, important role. Certain city buildings, or lets call some of them projects, are going to be key to the success of your local citizen units.
Build a granary in your city for instance. It doesn't make your city need less food to grow. What it does, is it makes your surrounding citizen units more efficient. More of the food they bring to you is kept good and dry. They make more money, you get more food. Slight commerce bonus, big food income bonus(% based up to a cap perhaps). It would also store food in case of famine or war of course.
Think about all the other improvements. Build roads in your city, and you are basically paving it''s local area. An important project that does more than add 15% hammers to your city, it adds % to every single citizen unit in the area, whatever it is they specialize in, whether that is bringing in iron, food, or what-have-you. They make more money(which you tax) and they provide more of whatever resources or services they provide.
Build entertainment in your city, and not only are you making the people happy, but you are drawing those citizen units in to spend their hard earned money.
A system like this would go a long way to making a lot of things in Civ 5 important, that were kind of under-utilized in past Civs.
You get full tile utilization in your empire(eventually). You get a more dynamic, less boring system for creating cities.
A method better suited to emulating real world economic systems than your standard "hill=2 hammer and a gold" concept. A hill really isn't worth much by itself. It is what you are doing on that hill. When you have a citizen unit go out to a tile, you will get options. Is he going to mine? Is he going to terrace farm? Raise sheep in the highlands? Build and operate a golf course? Beach resort? Observatory? Auto factory?
You can take a lot of buildings out of the city square, and have them placed all over the countryside where they belong.
You can build the great wall, 1 tile at a time.
You can have citizen units build the pyramids out in the desert where they will be viewed for the next 10,000 years as opposed to being a line on a city screen somewhere.
Take the city itself, and make it into the regional financial center they usually turn out to be. Cities form because enough people in a small enough area need a place to do business. This need gathers people and goods from all over, and things like entertainment and science start happening as a result.
Over time, articulate construction moves out city forge, and into the industrial parks around the edges, to be replaced by office towers, banks, shopping centers, etc.
One last point. This system works rather well with colonies. You drop off a few citizens, one builds a port/dock, the others feed resources into that port. Eventually a city forms in that far off land.
No city maintenance bogging down your empire, just pure gain apart from having to protect your citizens 3000 miles away.
Anyway, you probably get it by now.
Civ 4 is a good game, but 5 can be better.

I have an idea that goes along the lines of the OP.
http://forums.civfanatics.com/showthread.php?t=345938
Basically, do away with the settler. I know, I know, it is practically the core of the franchise.
Think about how population expansion happens in real life, and how it happened throughout history.
When the Oregon trail was in full swing, did we have large settler units that moved out and founded cities in strategic places? Not really. A wagon here or there, maybe even a dozen of them in some cases.
What we really had was vast numbers of unorganized people flowing out of cities and settling where they thought they could make a profitable living. Often they formed near already established trading posts, forts, etc. From which, cities began to emerge. These citizens were up in the mountains looking for gold. Mining towns emerged. They were forming religious conclaves in Utah, cities naturally emerged. They were quickly forming ports(vastly aided by government funding and organizing, which made the cities appear and grow that much faster) on the west coast that rapidly became some of the US's largest, most prosperous cities.
The same is generally true for most other civlizations. No one goes out with a flag, and says here is a city. They say, I could put a house and farm here, and other people eventually settle near them. Eventually, they go from farm, to village, and finally a city.
Vast numbers of people simply don't venture out in unison to found new cities. That is alpha centauri stuff.
Populations flow out to economically viable regions. And the cities form from the chaos so to speak.
So, how do we replicate this in Civ 5?
Basically, we make the worker into the dynamic for city building. Lets call them citizen units. They start out as normal worker/citizens but over history they can become specialists. I will discuss that later.
You start out in your capital. Lets say it starts as a level 1-3 with 2 citizen units. A city's population is all contained inside the original square and any that it expands into over time(multi-tile cities to make for metropolises and megalopolises at certain population densities later in the game). Anytime you have more than 1 population, you can spend a couple turns to push out a citizen unit which lowers the city population by 1.
This citizen unit can basically set down on a workable tile, anywhere it can walk to. When it does, that tile has an effective population of 1, or more if it turns into a village/town. However, the further it is away from your city, the less your empire benefits from it's product, be that food, resources, etc. Tech/road dependant of course. No upper range limit, but basically a scaling softcap.
So you spend the first bit of the game developing your capital and harvesting the resources near to it.
Culture doesn't limit where your citizen units can plant, but it does factor into claiming land for your citizens which is vital. It isn't a hard barrier to growth, but it will largely determine whether or not you go to war over a small piece of land. IE most civs won't war over a tile that has been in your culture for centuries, but if your citizens go outside the borders, they might be more likely to claim it for themselves or dispute it.
Ok, so you have a couple citizen units planted near your capital, either as farmers, or miners, or whatever. They learn quick and in flows their output. What about new cities?
Outside of a certain area, lets call it a soft city radius, your citizen units will try and band together to form cities once they reach a critical mass. Or, you can subsidize it with forts(major contributor to city creation in the ancient world since peasants would gather around them for trade and safety), gold, and forced immigration(throwing lots of citizens into an area makes it happen faster).
Once the area of citizens reaches a certain level of commerce or production(maybe even 1 citizen has had enough time alone to turn into a village and now wants to step up), you get an event prompt that asks you which local tile you want to place the city hall for the new city.
Bam, you have a new city that can start growing and furthering your empire. At the same time, you can have citizen units all over the place pouring resources into your empire, however inefficiently(if they are far from a city).
Further along in the game, new tech brings new citizen units. Most citizen units, given enough time on a tile, will get better and better, becoming experts giving bonuses to production of whatever they are doing on that tile(you would have lots of options on any given tile; mine, farm, raise sheep, gather lumber, etc).
New tech however, would let you produce say a miner citizen, whose sole purpose in life is to find a good hill or resource spot and gather as much as possible(more than a basic citizen unit).
You throw enough miners out into the vast wilderness and they will form a mining town(city) sooner or later. The mining town classification would be important because it would boost the production of local mines. Synergies and all that. Same for other towns that are generally focused on one industry. If you have 5 citizens working a coastal area for fish and what not you can pretty much expect the city resulting from that to provide an excellent source of seafood for your empire.
Bonus for specialization.
Once a city forms near your citizens, inefficiencies mostly go away. Now you have inefficiencies getting those products to other cities(again reduced by techs, roads, etc), but everything local is now focused by a local government.
Later in the game, you get access to corporate units that would travel great distances to exploit resources. Company towns form up around those exploited tiles.
You could even have hippy citizens all move out to an area in the wilderness and set up a special hippy commune that might form a city and provide benefits not seen with normal cities.
Engineer citizens building the Hoover damn, out materializes Boulder Colorado from all the furious construction and activity.
If you go out with your warriors and conquer some lands and place a fort(built and garrisoned by your soldiers) in some key, strategic location, then eventually(the more trade passing through the quicker) a city forms on or around that fort.
The possibilities are numerous.
Another thing this does is make those citizen improvements important, because if one gets razed now, you actually loose a population which is going to make the surrounding area unhappy.
Paths come automatically with a basic citizen unit, so if 3 citizen units are farming it up in a line from your capital, you have a worn path. Later units would come equipped with roads. They could build them too, as well as your warriors.
Cities also get a new, important role. Certain city buildings, or lets call some of them projects, are going to be key to the success of your local citizen units.
Build a granary in your city for instance. It doesn't make your city need less food to grow. What it does, is it makes your surrounding citizen units more efficient. More of the food they bring to you is kept good and dry. They make more money, you get more food. Slight commerce bonus, big food income bonus(% based up to a cap perhaps). It would also store food in case of famine or war of course.
Think about all the other improvements. Build roads in your city, and you are basically paving it''s local area. An important project that does more than add 15% hammers to your city, it adds % to every single citizen unit in the area, whatever it is they specialize in, whether that is bringing in iron, food, or what-have-you. They make more money(which you tax) and they provide more of whatever resources or services they provide.
Build entertainment in your city, and not only are you making the people happy, but you are drawing those citizen units in to spend their hard earned money.
A system like this would go a long way to making a lot of things in Civ 5 important, that were kind of under-utilized in past Civs.
You get full tile utilization in your empire(eventually). You get a more dynamic, less boring system for creating cities.
A method better suited to emulating real world economic systems than your standard "hill=2 hammer and a gold" concept. A hill really isn't worth much by itself. It is what you are doing on that hill. When you have a citizen unit go out to a tile, you will get options. Is he going to mine? Is he going to terrace farm? Raise sheep in the highlands? Build and operate a golf course? Beach resort? Observatory? Auto factory?
You can take a lot of buildings out of the city square, and have them placed all over the countryside where they belong.
You can build the great wall, 1 tile at a time.
You can have citizen units build the pyramids out in the desert where they will be viewed for the next 10,000 years as opposed to being a line on a city screen somewhere.
Take the city itself, and make it into the regional financial center they usually turn out to be. Cities form because enough people in a small enough area need a place to do business. This need gathers people and goods from all over, and things like entertainment and science start happening as a result.
Over time, articulate construction moves out city forge, and into the industrial parks around the edges, to be replaced by office towers, banks, shopping centers, etc.
One last point. This system works rather well with colonies. You drop off a few citizens, one builds a port/dock, the others feed resources into that port. Eventually a city forms in that far off land.
No city maintenance bogging down your empire, just pure gain apart from having to protect your citizens 3000 miles away.
Anyway, you probably get it by now.
Civ 4 is a good game, but 5 can be better.
