To illustrate the situtation I described above:
Yellow and Blue Circles are my Capital and first 2 cities. After settling them I conquered Sweden to the South and the Aztec to the West, annexing their cities gradually. After that I settled Green Star cities, and if not for colonies, I wouldn't be able to settle Red Star cities. I would need to either not annex previously conquered cities (which are better than any future north cities), or to wait until other players placed their cities there, or to let Sweden and the Aztec live and settle these lands for me. Overall, this goes somewhat against the expansionist idea of Authority.
Again, the problem is not that without colonies I have to make a choice between quicker development now vs. controlling more overall territory later, the problem is that I can get both anyway if I play in a specific strange way, leaving enemies alive with 1 city, until they settle all the territory I need (in case of Rome 4UC it also goes against Fornix UB).
I will agree though that without colonies you:
- don't choose exact placement of cities
- need to wait longer
- recieve additional warmonger penalties
- a civ you plan to "let grow" and later conquer can get a Defensive Pact with someone you don't want to go to war against (but this also means this civ can be your vassal)
+ but you also recieve some XP and some free improvements/unique buildings/works of art
So maybe to balance their addition colonies could be nerfed (not sure in what regard) a little compared to puppets. I just wanted to show that making colonies is already possible, albeit in a strange way.
Also, the AI opponents would gain the ability to spam colonies just like the player, at the same technology. So it doesn't really matter who and where places colonies, it only matters if you can defend it. Undefendable colonies would anyway be conquered just like a regular AI city would (with the exception that you don't need to wait for them to come, you can place cities yourself if you are closer). I think it is easier to teach the AI to place colonies everywhere it can (covering empty spaces), than to abuse the system I described above. I think it could also add more dynamic to mid-late game, like more new tensions and reconfigurations of allies/enemies, shorter wars for colonies, not for the mainland.