In a
gameplay sense this is the classic
"tall vs wide" ballance challenge. It can be achieved at the game mechanic level and then by adjusting specific values.
About the
simulation sense we must remember that CIV world scale also have a huge role here. There is not previous version of CIV were the map is big enough to represent states like Luxemburg or Lichtenstein (of course there is the Vatican but must remember that the Papal States controled a sizable párt of Italy at some point).
Considering that the average match still have some
"City States" (small nations) and some civs of different sizes at the end, this level of abstraction and world size in-game would still represent a decent number of states. So for example Geneve making it until end game is pretty much a representation of real Switzerland.
Now how much of an independent country can be this Geneve/Switzerland is matter of abstraction, since of course CIV6 suzerain system make it look like is a subjugated state, BUT this can be change in how civs gain bonus from
CS and the whole diplomatic system as a whole, so CIV7 could use and promote a system of neutral states that can be usefull as intermediaries and buffers between world powers.
In the other hand we can also abstract the fact that as much as Switzerland is supposed to be a "neutral nation" is pretty much part of the western world led by USA, and we must remember this, USA is the country with most recent advances in science, cultural influence, militar power, biggest economy, the third most populated and one of the top5 biggest in area, and seat of the UN in New York the
de facto capital of the world. So since CIV matches end around the current era we can guess who is the "winner" of real world CIV.
Also must remember that CIV games start at 4000 BC, just think about all those hundreds of cultures that were independent entities at that time, think about the unique languages and religions from ancient Middle East, Mesoamerica, or even the ancient China where different peoples were absorbed and/or displaced by what endend being the Han people. The whole world history has a trend to unification (with some high and low points).
Contemporary nation states like China, India or America were build over what used to be hundreds of realy different cultures, even things like the "Arabic" and "European" nations are quite homogenous products of the dissolution of peoples with completely different languages, religions and other cultural elements now lost to what are usualy named as a whole as "civilizations", you know things like "Europan Civilization" or "Arabic Civilization" while nobody outside games like CIV talk about something as absurd as a "Scottish Civilization" since civilizations are supposed to be suprastatal agrupations of entities with common cultural elements.
So if you want to "ballance" those two options first ask yourself.
1- Are any of those smaller European nations supposed to be the winner of the only example (real world history) we have to decide what is realistic for a simulation?
2- Anyway at the point of most power and influence all European world powers were in fact controling a colonial empire build over what used to be many small states (even in regions like India local quarrels were used in favor of european imperialism), so is not misleading portrait them as small nations?
3- Should not be the big boys like China, India and America (that are kind of the size of Europe each one but still have some differences between them) be the real examples to ballance what is an end game power?
4- If you are considering the use of successive states for a "civ" even after collapses and foreign occupations, why not also a permanent "descentralized" control of multi-state civilizations in the more common sense?
After all remember "
A war between Europeans is a civil war"
So I would also like things like more and more significative "
minor civs", way
bigger maps, actual
population to manage and get
social changes, ways to manage to work a
"quality over quantity" gameplay including diplomatic dynamics, etc. Still I think some CIV iterations managed to do a decent work to let you win some victory types without be forced to be the "
big global blob" even considering real current world have some powerfull blobs.