Good luck with your mod, so
.
You're right, however. It's absurd a nation would hand over a city because they like the culture of the other nation.
It's not so absurd however for a city to consider herself part of another nation.
Because I'm Italian before being European, I can mention the example of the Italian city of Fiume in 1919 being occupied by Gabriele D'Annunzio with his "legion" ( several grenadiers, unhappy Italian soldiers, volounteers ... ). In fact the city with a certain percentage of Italian people feels to own themselves to Reign of Italy instead of newly formed Yogoslavia, even if there were Croatians and in any case Slavic minorities.
In Civ3 it has been simplified with culture, with culture it's assumed near cities are influenced by the enemy civ ( yes Civ3 it's too much like a deatchmatch ... of course every nation of the modern world wants to survive and not being enslaved by another, but it's absurd every one want to "konquer worlt, ja??!" ) so migrations of cultural identities located in the mind of the migrants, are virtually assumed as "cultural influence".
In reality, it should be as the example I told above of Italian ( well, before 1945 ) city of Fiume in Dalmazia.
And of course ONLY AFTER the discovering of nationalism.