Oops, I said squatting, what I meant was exploiting.
Exploiting is building units, cities etc. as one civ, switch to another civs and taking all you produced with you previous civ.
e.g. When you are Greece, you can build some cities in western Europe. You produce some units and move them into the Roman spawn zone. When Rome spawns, the units will flip. As Rome, you take the Greek cities (which you left undefended ofcourse).
This gives you a huge advantage when playing Rome. (Free cities and units.)
Squatting is building your capital on the spawning plot of an other civ. When that new civ spawns, their units won't move, because they are in you territory and you don't have open borders with them. It won't build any cities, so you have one opponent less. And because capital spots usually are pretty good, you have a decent city spot.
This is not possible in the current versions of the mod, because capitals can flip now. Only if you have 1 city, it's still possible, because you're capital won't flip if you have only 1 city.