I used to think that Feudalism was completely pointless, I could see no benefit to it what so ever. It seemed to be Monarchy with war weariness and a bad free unit support system.
I have now changed my mind about this government.
I have played all three installments of Civilization since Civ1 was first released and in all this time I have had an aversion against placing my cities too close. I always play OCP (optimal city placing - no city overlap). In fact, in civ1 and civ2 I would not even tolerate a single square to overlap and if the terrain forced me to place a city with a shared square I would restart.
In Civ3 I got a little more tolerant and could accept a square here and there to overlap even though it was still a little annoying. I've read about how others placed their cities closer together and while I believed this could be more effective I never thought I could stomache so much overlap. I wanted the 20 squares for my city, thank you very much. Besides, I was doing just fine on Monarch, usually no problems at all.
Then I decided I had to try just once to play with a tighter placement. I decided on xoox, or two spaces between the cities in all directions. It was tough going in the beginning, almost quit since I did find the overlap most annoying. But I hung in there and eventually I saw the difference in my progress of the game.
Normally, I place a fair amount of cities, build almost all the improvements and only when attacked or out of 'civilian' stuff to build do I start building military in any serious way. This usually results in a couple of Knights taking a few cities in the Middle Ages and then another offensive later with Cavalry. Before that I would simply not have enough troops to do anything.
I am now on my third game with this placement and although I had a very good start this time I am doing so well that I simply cannot play on Monarch anymore. It's starting to feel like Warlord. I am Iroquois (always play large maps, default everything else) and with the help of a game for my capital and a wheat each for my next two cities I was able to have two four turn settler factories and one five turn.
Well before 0AD I had advanced through the Ancient Age and built up a significant force. Building no improvements other than courthouses in those cities with more than 50% corruption, I have built some 200 Mounted Warriors, 60 Workers and 45 Warriors. Not to mention countless of Settlers of course. I chose Monarchy this game and the upkeep is really hurting at this point.
I've taken out India and Japan with ease but since I started on the biggest continent I've ever seen, taking the entire continent may take some time (and probably suffice for a domination win).
Anyway, with the incredible tech pace, waiting for Feudalism would have taken very little extra time (especially if the AI would be able to stay close to my research rate on higher levels and have something to trade) and with the massive amounts of small cities I have, my free upkeep would be 2.5 times higher with Feudalism then Monarchy. This could be several hundred GPT. I will probably give Feudalism a try next time.
I still find the overlap annoying but when you see the results it's hard to go back... I never thought it would make such an incredible difference. It really is two or three difficulty levels of difference.