I think the OP has, at this point, acknowledged that his Venice game is not the best example of the problem he's identifying. Cromagnus not only took a capital from a Civ, but its only city - and the AI has NEVER liked another Civ being wiped out. Cromagnus should have at least brought either Hiawatha or William with him to war, and the Cromagnus could easily have verified that Venice only had one city (through the trading screen, under "cities").
Still, I understand Cromagnus' point: the warmonger penalty is a little too harsh (and it should be harsh!). The fact that Hiawatha, of all people, was mortified by someone else's warmongering, speaks some volumes. (He'll of course change his mind the minute he has Mohawks.) Cromagnus' actions should have had negative consequences, but those consequences should have been mollified somewhat by the fact that Cromagnus was on very good terms with Hiawatha and William and everyone hated Venice.
Cromagnus might have deserved those denouncements from his friends, but the chain of backstabbing DoWs that followed...Well, I understand why Cromagnus would feel the need to vent. It's a problem that your friends can turn on you so quickly, and the fact that such large warmongering penalties linger so long will also snowball negatives for the rest of your game. (IMHO, early warmongering should be forgiven more quickly than mid or late game warmongering.)
Assyria DoW's Portugal, and captures one of her 3 cities.
Here's where it starts to get BS. NO ONE DENOUNCES.
Excuse me? What happened to auto-denounce, auto-DoW? Only for the player? Oh I see.
Taking 1 out of cities 3 cities will only incur a minor warmonger penalty (compared to, say, the major warmonger penalty of taking a Civ's only city). This isn't denounceable to most Civs, but it might irritate them.
Everyone loves me right? Wrong. No one but Portugal appreciates the liberation.
KOREA AND CHINA THINK I'M A WARMONGER. Excuse me? Well, at least they didn't denounce.
Yeah, a liberation shouldn't incur a warmonger penalty at all, IMHO.
China Denounces me. Arabia backstab denounces me. On the next turn, Assyria takes back his city because he had two siege towers out of view behind the city and hills.
I also agree this is a problem under the new system. If a city is rapidly changing hands (horrible under any circumstance), the warmonger penalty needs to be waylayed.
Maybe Montezuma is troubled that Oda isn't providing his citizens an adequate social safety net in 800 B.C. as well?
AIs trying to stop a run away is always good. Only problem the wars never stop until I have up, on turn 300. I had at least 2 frontline at all time and could barely trade with anyone. It was fun to overcome adversity but this went a little too far in my opinion. What would you have me do differently?
Should a 10 turn war turn 60 should doom me for te next 250 turn?
I've been the victim of this too, and it really does ruin a game. I was in the middle of a snake-like continent, surrounded by city states, with Portugal and Indonesia on either end. I took one of the City-States, needing the only Iron nearby that was in their territory, and there were few viable spots to settle. I made mistakes, admittedly, but the result of Indonesia and Portugal bouncing me between wars the rest of the game (when I made peace with one or got the upper hand, the other would immediately DoW) forced me to wipe them both out so they would finally fricking stop.
Warmonger penalties need to die down much quicker in the early game than they do.
The best fix would be a Casus Belli system...
Everyone wants this, Firaxis.