Basically, the idea is as follows: Larger cities can do things that smaller cities cannot, and not simply in being bigger and being able to build more, but in opening up new options, instead of being able to select more of the same options. I want to add the idea of the pyramid (mentioned earlier in this thread) to that, as the core of an empire is indeed often sustained by the rural areas, and I also want to call back to a discussion before the release of Civ 6, where it was said that the "wide vs tall" might be replaced by "urban vs rural".
Before going into detail, one of the biggest advantages for a system like this, in my opinion, is that it does not penalize a player for making a choice, be it "building a new city" (wide) or "growing a city" (tall). Instead, it grants bonuses depending on what you choose - the only penalty is not unlocking something because you're choosing for something else, which feels
very different from a player perspective.
Now, going wide already unlocks things: Most importantly, it unlocks the ability to grow more cities, and to build more units and buildings at the same time. In Civilization VI in particular, it grants the advantage of being able to build more districts of the desired kind; after you've built a campus with the at-that-point-available buildings, there's no way to further increase the science in the city (excluding the minor science per pop), except building a settler and building another campus in that new city. Going tall, however, unlocks relatively little: only said minor amount of science and culture, as well as some tile yields, though this tends to be insignificant apart from the production yield, which you can of course convert into all kinds of other things. To add to that, population growth in Civilization VI is relatively slow; I, at least, barely ever get the eureka's related to "largest city"; only Early Empire I do normally get, and I typically have 2 cities already at that point.
So, there needs to be a bonus for having bigger cities, to balance against having more of them. As
@universecreep mentioned (or in fact started the thread with), a good idea to do this is to add bonuses to big cities, is to make them population-restricted; this basically solves all problems that a system might have at once: It cannot be accessed by just spamming cities (which would defeat the whole purpose), it can be explained flavour-wise (smaller cities cannot support such things)
and it makes sense from a gameplay perspective, as it is a 'reward' you unlock by growing your city to a certain size, even if this reward still requires you to pour in production; just make it worth that production.
Now, there are two main systems possible for these bonuses, a passive, and an active system. A passive system is very simple: When you reach size X, you gain bonus Y. An active system not only requires you to reach size X, but to actually get bonus Y, you need to do something. In Civilization terms, that will most likely mean two different things. The first is to add buildings, that most likely require a district (or even two) on top of the city size requirement. The second is to add wonder-like buildings that require an own tile, but are not unique, in that more than one may be built of them. They may be limited to one per civilization, but do not neccessarily need to be. This depends both on how strong their bonuses are, and how the balance works out in practise.
As for passive systems, these may be automatic ("once a city reaches size 15, you gain +5 science, +5 culture, +5 faith, +5 production, +10 gold, +1 amenity", or a "every citizen beyond size X" version of this to reduce spiking) or may be depending on districts you have (I would like to see this part for certain, as it increases the importance of districts) and may additionally require a player choice, where you can maybe select a bonus to only one of your districts (and therefore yields). For example, a city reaches size 20 while having a Campus, Industrial Zone, Commercial Hub, Encampment and Harbor. Now, the turn this city reaches size 20, you get a choice:
(just some not neccissarily balanced ideas for what you could do)
1. +5 science, +20% science in this city.
2. +15 production.
3. +8 gold, +2 trade routes.
4. +50% production towards units.
5. +10 gold, +5 food.
Note that a deliberate part of this (at least from me) is that you
cannot specialize a city towards a district you build after reaching the threshold. This makes sense from a flavour perspective in particular, as, say, a Theater Square built after would not be a historical part of the city; the cultural importance was attracted to the city after it became big, while historically, it might've been a scientific hub instead.
Now, there are two more things I have not yet addressed. These are fun ideas to incentivize (sp?) bigger cities, but they do not stop you from simply going wide first, and then afterwards going tall, and simply getting this in all your 20 cities. However, this can be solved through the
other thing: The empire is not yet pyramid-formed, as cities do not really interact with one another. To change this, trade routes are split: There are now domestic traders as well as international traders. International traders are limited by harbors, commercial hubs, etc, whereas domestic traders are limited by things like the amount of cities owned. Of course, this is the basis, and there could very well be more factors, also because domestic and international trade routes no longer need to be balanced against one another, allowing more freedom to tweak.
Next, those domestic traders do not anymore generate a heap of food and production. Rather, they
transport food and/or production from one city to another and generate a minor revenue (taxes over the transported goods). This allows you to build rural cities with a lot of farmland, and then send traders from those cities to your central cities, giving you the food required to turn those cities into megacities (also solving the problem mentioned in my third paragraph that cities grow too slowly) and at the same time freeing up more land in those central cities for districts, wonders and whatever else, as you no longer need to have farms locally anymore. This allows for two different playstyles: A "tall" playstyle, where you use rural cities to pump up your core cities, which turn into urban megacities with special buildings, tons of adjacency bonuses, etc. On the other hand, a "wide" playstyle, with self-sustaining cities that have a few districts at most, but all directly contributing to your empire (instead of being food silos) and being able to do stuff. It should be noted that, for both styles, more cities is better. However, a tall playstyle will still mean less need for micromanagement compared to a wide style, which (at least in my understanding) is the most important reason for people prefering tall. On top of this, it would be possible to add a way to import food from other countries, actually removing the requirement of the rural cities, which can, basically, be owned by a neighbouring civilization.
This last thing would actually bring back tall playstyle as it was before - just a few, big megacities. However, it would do so without strangling wide (as happened in Civ V), and on top of that it would require good relations with your neighbors, just like real life "tall" countries like the Netherlands (we actually got a surprising amount of farmland by the way) or Japan (who probably got a surprising amount of farmland as well, I guess).
