My thoughts on a merc mechanic: An ability any hippus unit can cast in another civs lands that gives them a promotion causing all other players to treat them as if they belonged to that player. So Hippus could participate in any wars in which they were friendly enough with one side to have open borders, without getting the penalty for declaring war with either side. Any cities those units captured would go to the civ they were working as, and they could only lose this promotion (and thus be immune from counter attack) in their own lands.
I don't think this would actually be good because it would be easy to exploit--work both sides, eliminating every unit in two civs without declaring war, then declare war and roll in to take over.
It's my impression that, historically, mercenaries drew the most dangerous tasks, so why not make a "on loan" promotion that adds the ability you describe here plus, say, the defender promotion so that in any stack with a merc in it, the merc gets attacked first, or any of several other penalties.
Would it be possible to transfer control of a unit for, say, 10 turns and then have control revert back? Could be a temporary promotion. This, too, could be exploited. Unless you somehow cast the "escape" spell when the loan ends, the temporarily loaned units might end up somewhere that the Hippus otherwise could not reach. Instead, it would be ideal that mercs returning from service show up at the capital, I think.
Even more complex -- have Hippus "deliver" mercs to the hiring nation's territory (or capital) within x turns or contract expires.
[tangent -- as to playing Hippus, they are very good as an AV civ with raiders, and have a great late game hero. I played a game where I got the AC to c. 90 -- the first three avatars landed near Basium, but the Avatar of Wrath landed adjacent to my Nexus and spawned 30 - 50 units in my territory. Luckily I was able to build Meshabber with a lot of saved gold -- I would never have tried to save that much gold had I never played Khazad -- in summary, Hippus provide an interesting warmonger alternative style of play.]