Thanks Kayak. I think that would be a pretty fun / interesting game, but I'm only one person. Like I said, when I think about a game called Civilization, I think about all the things that makes a civilization historically important, not just its military. These kinds of improvements to gameplay are very compatible with Civ as it is now:
In the classical age, wars were over territory, and people pledged allegiance to their leader, not their country. Leaders were megalomaniacs, and you could sum up their goals with "might makes right". Civilization does a great job of this part of history.
In the middle ages, wars persisted, but with more complex relationships. There were larger networks of cooperation, and this was often facilitated by religion (Christians versus Muslims). But more than religion, this was really a function of cultural difference. You and I might be different, but those guys are even more different than us -- we should cooperate against them, even though you and I don't always see eye to eye. I think Civ could do this a lot better with a more effective culture model.
By the industrial ages, there were essentially two kinds of wars.
First: With the advent of nationalism, suddenly people pledged allegiance to a state -- their culture tied them together, instead of being tied together under an emperor's sword. This was very interesting, because suddenly people living under one leader would say "sorry man, but we're not Ottomans. We're Greeks: we've been Greeks all along. We have a rich history and culture that has nothing to do with you." These were the source of numerous conflicts, with various nations claiming certain lands belonged to them all along. I also think an improved culture model would describe this.
Second: Economic motivation changed the complexion of war. It didn't make sense for Britain to invade Africa or India and take over completely. They only wished to take over to the extent that they could sap the valuable resources: diamonds, silk, spices... as well as controlling valuable trade routes. It actually cost much more to build a complete infrastructure in these foreign nations and go to the effort of assimilating these people, who would surely resist. Occupying their territory and leeching their resources was just the smartest thing to do. A better economic model for Civ would make this part of the game more interesting.
And I know I said there were two kinds of wars in the industrial age, but there were still classic megalomaniacs like a Hitler. Civ has never had a problem modelling this. But one of the reasons that the industrial age in Civ is so boring is because you're really left with four big empires at the end of the game, instead of a richer experience.
The modern age is a whole other story... but I think the conflicts of modern times will be defined by the Cold War -- faught largely between puppets USA and USSR, without a single bullet between the two superpowers. I also think it will be defined by the Iraq war, where even an occupation is frowned upon, and maintaining a "friendly regime" is the best one can hope for.
Anyway, sorry for being too ranty... but I think that making the latter part of the game more interesting would be something that a lot of people can get on board for. And I think it's related to some of these non-state actors and forces and constraints. A growing sense of moral outrage at the classical model of conquest: pillaging and genocide. Cultural contamination from your neighbors, whether they intended it or not. Multiple nations united by a sense of common history, with your people demanding that you take a side in a conflict you'd really rather have no part of.
With state-only control, sometimes I wonder if people would have more fun playing 4 games of Rome: Total War and skipping the last 2-3 ages of a Civ game entirely.