In the scenario I'm working on right now, I want a civ to be able to build a UU depending on the nationality of the city, and to do that I planned on putting a 'people' resource underneath every city, but disallowing internal trade of that resource, so that city, and that city alone could make a particular type of unit. For example, the French own a couple of cities in Germany. Underneath those cities I have a 'Germans' resource. 'German Musketmen' require the 'Germans' resource to build. I want it so that the German cities and those alone can build German units, and the effects of the resource aren't seen in Paris (so you can't build 'German Musketmen' there).
See what I'm trying to do? I've turned off sea trade, but that still presents the problem like I mentioned earlier about France owning parts of Germany. So far the only possibility I've heard is to disallow the building of roads, and either get rid of roads altogether, or make sure no cities are connected (which would be a pain).