A game should cater to both. In Civilization IV there were many times I was not worried about winning, because I was having fun playing. I cannot say the same for CiV, because for the most part everything you do is concerned towards winning, there is little deviance from that. This does take some fun away. To make a game more fun it needs more immersion and depth, to help you think about other things than just trying to win, which is why they have added religion and espionage.
In many respects CiV is not a simulation though. A simulation would be a game like Europa Universalis, Hearts of Iron, or the Total War series. These games are simulating history and military strategy. Total War goes about doing this from a very realistic POV, real battlefield graphics and tactics etc. The other two have historically accurate functions which simulate history, but without the realistic graphics.
In a game like Fall of the Samurai, you of course have a victory goal, but you do not have to choose any certain way to play at the outset. The game is more engrossing in this way, CiV sadly is not. When you play V, pretty much your going to know what victory condition your going to try for, which sets the stage for your whole game. With FoTS that varies as the game goes on depending on what happens with rival provinces etc, and what you end up focusing on. There are tons of variables. CiV does not have a fraction of these choices. The game is simply about winning, and it is designed to make sure that is all you care about the entire game. Making the right moves, so you are closer to victory. I scoff at this, because it gets old and monotonous. With the XP CiV will be a few more steps ahead with regards to the fun factor. CiV still will not be a history simulator, and it should not be, but it will be more enjoyable to play.
Let me give you an example. In my current game of CiV, I have already lost. Victory has been out the windown since 1861 AD, when I lost my capital and most of my empire on the continent, I began the game on. The reason I am having fun is simply because I am not worried about winning. I have made it to the Terra continent and I am just content building up and micromanaging my new cities. Really it is the most fun I have had playing in some time. My plan is to do this until GnK comes out. No sense starting a new game.