moving palace is very costly (160 hammers in the timeframe we talk here are no joke, it's like 2/3 of mids with stone cost) and making clearly suboptimal capital city when you have on hand fantastic spot with 3 food source (even if one sucks a bit) enough riverside and hammers would be very ???? move. the strategy here should be obviously min->bw and I would prioritize pottery then since DS is resourceless and pigswill should get out couple of them easily with BW and forests needed to be cleared for cottages to be placed. City 2 could indeed go north for overlap on cottages, improved hills, or towards AI depends a bit on correct scouting.