Yes, this can happen when a large AI civ loses its capital. It is a bit weird to get the message when you don't have contact with that civ, but I can easily imagine the news being brought by political refugees fleeing persecution or something.
Yes, it happens a lot.
Whenever you are facing tough competion from a rival civ or you want to punish them military, if possible always aim for conquering the capital.
Please note that there's a prerequisite for the split to happen: at least one of the civs that started the game must have been wiped out.
In other words, the game needs to have a vacant colour for the new civ to use.
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