To discuss how we feel about limits to expansion, we need to first consider what we want end goal we want to see in the game. What I see as important design goals for mechanics related to city caps, settlement caps, global happiness, corruption, and all of that are:
- Allow for a broad range of strategies.
- Don't create a situation where the player needs to micromanage an excessive number of things (aka, handle the building queue for scores of cities).
- Encourage expansion such that there's no reason not to use up all the "good", nearby land by the end of the Ancient Era. Extending this to both all "good" land anywhere and all nearby "marginal" land by the end of Exploration. Eventually all but the very worse land by the middle of the Modern age.
- Punish rapid overexpansion.
These might seem in tension, but I don't think they are incompatible. Crucially, Civ7 splitting up settlements into towns and cities allows expansion without tedious repetitive micromanagement.
Encouraging expansion while discouraging rapid
overexpansion could be done by having an opportunity / temporary cost for expansion which is eventually paid back (with interest) once the settlement has developed. This same opportunity cost could, in the right circumstance, even discourage expansion strongly enough to make going "tall", and ignoring all but the closest and most productive land, completely viable. Opportunity costs to expansion have existed in past Civs. The exponentially growing settler cost of Civ6 is one. The maintenance cost of Civ4 is another - a city would be a drain on gold until it grew enough and could produce more than it consumed (dozens of turns at least). This is different to corruption in Civ3, which took a fraction of the cities production but never made a city be a net negative to the empire's economy. Growing by conquering your enemies is another opportunity cost in terms of the resources that went into building the conquering army and recovering any losses.
Conversely, the global happiness of Civ5 was a permanent cost to expansion. A city would always be a net drain on global happiness from the turn it was founded until the end of the game (with a handful of ways of reducing this cost substantially). The settlement cap in Civ7 appears to be another such permanent cost. Note that both in Civ5 and Civ7 the limit is a soft cap rather than a hard cap, which is very important, and also one that increases during the game. But that doesn't stop those costs from being permanent rather temporary ones.
Putting all this together, how do I think the design goals above could be reached with the mechanics of Civ7? By having only an
opportunity cost for new Towns (thereby encouraging the whole map to eventually be settled, though not too quickly), and having an AI and combat system that makes expansion-by-conquest expensive, while having a
permanent cost to Cities (to discourage the player from upgrading all towns to cities and having to manage them all). By adjusting the size of those costs with policies, governments, civ abilities, wonders, techs, era etc... the game can allow a very broad range of expansion strategies to all be viable, and viable at different states of the game.
Do I think Civ7 is going to reach this dream? I'm not sure. The fact that the cap is a settlement cap rather than a city cap means that towns also suffer from the same permanent cost and, to me, this is a big disappointment. I don't know enough about this version of happiness to know if Cities and Towns will be impacted equally under it. Not sure what opportunity costs there are (if there are any beyond the cost of a settler) to discourage the player from rapidly expanding right up to the permanent-cost limits.