Empire Total War: How do you have a revolution?

Have either social class be red-faced for three turns in your capital city. Nobility anger causes absolute monarchy, middle class anger causes constitutional monarchy, and lower class anger causes republicanism.
 
Is there really any reason to change it?

Republics can only replace one minister per round and are hated by monarchies, but they also have faster research rate and their lower classes are much happier. Also, they might have faster economic growth; unsure about that. Generally republics are more useful if you're a faction that already has no/few allies, like Russia, though the hassle of having just your capital city be angry for three rounds can be a pain.
 
And you get a new flag (like if you change France to a republic, you now have the modern French flag). Also, does the AI ever have revolutions?
 
Republics can only replace one minister per round and are hated by monarchies, but they also have faster research rate and their lower classes are much happier. Also, they might have faster economic growth; unsure about that. Generally republics are more useful if you're a faction that already has no/few allies, like Russia, though the hassle of having just your capital city be angry for three rounds can be a pain.

As a player faction in total war you already are going to be disliked and often alone.
 
And you get a new flag (like if you change France to a republic, you now have the modern French flag). Also, does the AI ever have revolutions?

Yes, I've seen it once. As Prussia I destroyed all of France's continental armies and sieged Paris, and then had one unit garrison all of their economic and happiness-creating buildings. Their lower class was at +1 because there's something like a 10 happiness bonus when you're being invaded.

After I withdrew, France remained in bankruptcy and was unable to fix their buildings, so their happiness plummeted and had a revolution.

As a player faction in total war you already are going to be disliked and often alone.

Since allies don't do anything in E:TW, the only purpose in alliances is to protect your flank. So it's usually desirable as Prussia or France to maintain their treaties just to avoid getting invaded in every direction.
 
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