I don't know if any of you have ever played Europa Universalis II, but I liked the way wars worked in that game (as far as capturing cities goes, anyway.)
How it worked was this: During a war, once you've defeated all of the enemy units surrounding the city, you would have to lay siege to it, which usually took around 9 months, but could be anywhere from 2 months to 2 years or more if the city is heavily fortified, and you only have the minimal number of troops. At a certain point, however, the defences would be breached, and you would be able to assault the city, and take it with your troops. You would lose a lot more troops this way, and even risk losing them, but take it much faster. The city produces nothing at all while it is under siege, and the attackers get a little bonus to their treasury after the first turn of siege for "looting." In Civ, this could be represented by a unit or units laying siege to a city, and it could be like a worker action: It takes 6 turns for a normal unit, 3 for an artillery unit, etc, and you could have say 2 artillery and 2 cavalry take it in 1 turn. Or, after it is half taken, you can assault it, which would use your unit to attack against a unit with say a defence of 2 for each age (up to 8 in the modern age) and as many hp as citizens. While it is under siege, the city would not produce anything for anybody.
Once the siege is over, it becomes occupied territory, which is still of no use to either side. The attackers can leave it empty, however it will then be vulnerable to attack, and any enemy unit can take it right away.
Once you decide to negotiate a peace treaty, you can ask for some of the cities that you occupy, plus techs, gold and whatever in return for the peace. You would rarely be able to get every occupied city out of a peace deal: Usually only half to 3/4, unless you occupy their entire territory, in which case you receive the option to annex their nation entirely.
Also, when you take over a city, A certain number of people should emigrate from it into the nearest surrounding cities of their former civ, depending on how each nation treats their citizens, government type, happiness, etc.