You got it in a nutshell. Tradition is for players who want to focus heavily on their capital, especially its growth. Its also for wonder focused gameplay. If you want to focus on expansion they can go honor. If they want to focus on infrastructure and building they can go liberty.
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Wow. I now finally understand why I dislike this incarnation of tradition, and why I'm so apart from everyone else here. You guys are being misguided by a gross mischaracterization of concepts.
Listen, everyone:
The goal of the first three trees is to offer a "holy trinity" of main gameplay enchancers: two that are opposite to each other in terms of structural choices (quality vs quantity, expansive vs compact, aggressive vs defensive) while the center one is a neutral one that can potentially work for either side.
Tradition is the opposite of Conquest. While Conquest is about expansion, and quantity over quality, Tradition is about little cities and high population. It is more suitable for peaceful empires who don't want to have to fight for their land, and want the comforts of not having to manage a great empire.
Saying Tradition is all about capitals is not only a grave trivialization, but also doesn't do anything for what it's supposed to support. Again, every player has capitals. Therefore literally
every player would benefit from a capital-centric policy tree. It may not work better for their purposes than some other tree, but if they so choose to get one like this, it will
actually help them. This tree doesn't maximizes "Tall" style gameplay, it simply makes it so that players with at least one capital can benefit from it, which granted, will benefit tall players, but there's nothing in it that doesn't benefit
everyone else. Everyone has at least one capital in the game, at all times, even if their initial one is captured.
And that's why vanilla Tradition is OP; it's good for everyone, because everyone has the bare minimum of things that it benefits you from having.
Take Conquest (or "honor", if you wish) for instance. Would a player going for little cities and a peaceful victory goal benefit from it? Perhaps only very little. This tree was designed to help a particular game style, and will only help players following that style, so much that it becomes a sub-optimal choice to embrace it for players going for a diametrically opposed strategy. It was designed this way, and it should be this way. And that's good design in my view.
A "Capital-centric", and especially a "wonder creating" (again, for the third or fourth time, there are wonders for all kinds of goals and it makes no sense to shove all-encompassing wonder making into a tree that's all about one certain kind of gameplay) is about as neutral as we are making Liberty to be, and perhaps even more so considering people constantly try to push their "peaceful expansion" concepts down its throat.
If Conquest is about expansion, and "Wisdom"/Liberty is about neutrality, then we're left with one more gap to be filled. The way you're describing tradition
does not fill this gap.