I agree that Civ picks leaders because that are familiar to the West, but mostly disagree that this is a problem. Part of the appeal of Civ, for a lot of people, comes not from its historical accuracy but from the bizarre juxtaposition of familiar figures and societies. This depends on some amount of knowledge about the people and places depicted. For example:
--What if Sitting Bull and Queen Elizabeth clashed with Ramses at the battle of Tokyo in a battle to gain control of the Eiffel Tower and spread Islam throughout the New World, but their plans were foiled by the head of the United Nations (Montezuma)?
Civ is not history. It's a kind of fish-out-of-water comedy that pokes fun at real situations. This is after all a game where the repercussions of slavery are a minor reduction in production and a temporary frownie face. Nuking the enemy is treated with all the gravity of declining to teach a guy Horseback Riding.
Humor is hard to translate. Saturday Night Live can make allusions to Michael Jackson and Britney Spears because we are familiar with those people and what they represent. We might say they are freaks or fakes with no talent but it is really beside the point. They are more commodifiable (a requirement for this kind of comic effect) than say, Sarah Brightman, an infinitely more talented singer with about zero pop cultural appeal. And, IMO, Civ IV is all about history as pop culture.
Mansa Musa. George Washington. Queen Victoria. Montezuma. Hammurabi. Hapshetsut. Stalin. Ghandi(!) And yes, Mao Zedong. All part of a schlocky, psuedo-historical Western pop culture. So, yes, the game is profoundly Western, but I don't think that should be surprising. Some humor just doesn't translate well.
Lastly, I'd like to point out that for all the "errors" that supposedly exist for Eastern civilizations, there are vast "mistakes" made about the Americans civ itself. Discounting the absurdity of the USA existing in 4000 BC for a moment, you might notice that many American city names should actually belong to a different civ--Los Angeles, San Francisco, New Orleans, all originally cities of foreign empires that eventually made their way into American hands. Are there "gross errors" in historical acumen here or was the game not meant to be a literal version of history?
And, BTW, I suspect Wang Kon was picked over other Korean leaders because he looked cool to animate. Not that other Korean leaders wouldn't look cool, but you have to admit they did an awesome job with Wang.
) It wasn't so much her physical beauty as the woman herself who enchanted, we are told....
There was a thread around here discussing why Korea deserves its spot in Civ4. I'm NOT going to waste time posting paragraphs on the thousands of years of Korean history when no one even bothers reading in the first place. 
Just search "Why is Korea in the game."
