I've played two DYP games so far. One at chieftain and the other Warlord. Ive noticed that AI cities appear to grow at half the rate of mine.
This is the cost factor. This is what makes the levels harder/easier. On chieftain and warlord, it takes the AI longer to grow in population and longer to build stuff. On regent everything is equal. Monarch and above, the AI grows faster and builds faster than you. Before 1.29f, the AI would also research slower than you on chieftain-warlord and faster than you on monarch-deity. But with 1.29f, the human is handicapped (harder for you) in research on higher levels, and given bonuses (easier for you) on the lower levels, so the AI supposedly researches about the same on all levels. Cost Factors:
Chieftain - 200% (It takes the AI twice as long to grow, build stuff).
Warlord - 120%
Regent - 100% (Everything is equal)
Monarch - 90%
Emperor - 80%
Deity - 60% (The AI only need 60 shields to match your 100 shields).
Also, starting at Monarch and levels above this, the AI starts getting more free units at the start of the game.
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yeah, I think moving the merchant/caravan units until later in the game would be a better idea. It would be good where they are now, if the AI knew how to change production from caravan to wonder, and if they built some other infrastructure before building these. Right now, they will spend 750 shields on building a caravan, and want to use this to rush a 400 shield wonder

. I took them out of the game, and while it is a pity that when the cascading of wonders stops, they have to waste all those shields on something stupid like a settler, that's better than having the AI spend the next 100+ turns building a caravan, only to want to build yet another one after that. An 8-shield city should not be building a 750 shield item!
I doubled the tech rate on the 180 X180 world map and that seems to help slow things alot better, so the AI isn't getting into the middle ages before 0 A.D.
Theocracy: Although it may be nice to have this in the game for historical purposes, the bad part of this, and communism with standard civ3 rules is the pop rushing. The AI does not use pop-rushing effectively. And late in the game, there aren't alot of things to poprush without whipping a massive number of citizens, which leads to massive unhappiness. Whipping governments should only be in the ancient era when you have some cheap stuff to build. I stay in chiefdom until I get democracy, then switch to a much later government that has paid labor. I totally skip any forced labor governments.