I am struggling to win against the AI at any difficulty higher than Warlord, even though I have done various things to attempt to make the game easier - "Sedentary Barbarians" "Less Aggressive" AI (what a joke), as well as creating a custom biq file and modifying one race to have extra traits. So before all the "Wow, you must really suck" comments. Yes, I really suck. What am I not getting?
I won't say you really suck (everyone gotta start somewhere), but from the below, it sounds like you're trying to play Civ3 as if it was Civ1, which isn't going to work out well. I haven't checked your savegame (yet), but here's what I think of your general approach:
Here's how my games usually go: I try to expand like crazy at first, snagging any tradeable resource, bonus resource, etc that looks good.
This is a good initial tactic, especially at Regent (arguably also at Monarch) and below, when the AI won't be able to produce Settlers/Workers nearly as fast as you can (because it sucks at tile-improvement prioritisation, and can't micromanage to avoid food/shield wastage). But there comes a point where you need to stop expanding outwards, and start building up those towns.
I don't clump my cities super close together as I've heard some do, but I try to keep them close enough for reasonable defense and corruption reduction. I build a network of roads between/around my cities.
Also a good move. Roughly 2 tiles' separation between towns , i.e. City-tile-tile-City (CxxC), is a good rule of thumb to follow, since then each town gets at least 8 potential 'exclusive' tiles to work -- and more than that if the road between the towns (roughly) follows the N-S or E-W axis. CxxC also means that foot units can move (along roads) from 1 town to the next in a single turn, if you need reinforcements. BUT if your cities are staying small because you're constantly siphoning off pop-points into expansion/ tile improvements, then you're not going to be able to
use all that territory that you've claimed. So let your towns grow -- at least to Pop7 if possible (makes no difference to military support under Despotism -- 4 units per town, and 4 per city -- but a big difference under Republic: 1 unit per town, 3 per city). If you have lots of (spare) Workers running around, adding them back into your Pop7+ cities might be a good idea.
Other than granaries, I usually stick to building more settlers/workers to try to expand faster instead of lots of units, city improvements, or wonders.
Avoiding Wonders and unneeded improvements in the early stages is also sensible, but deciding what
is needed can be trickier: e.g. Granaries are
not needed in all towns in the early game. Yes, they help a town grow 'faster', but 1 Gran costs the same shields as 2 Settlers -- or 3 Archers, or 6 Warriors -- and regrowth in a 'standard' +2 food-per-turn (fpt) town will still take 5 turns, even after you've built the Gran. It's generally better to restrict Grans to your food-rich towns (i.e. those with Wheat and/or Cattle in the Fat-X), ideally those towns which have freshwater, and can get to +5fpt under Despotism (i.e. growth every 2 turns, with a Gran), and then use those Gran-towns to build most/all of your Settlers and Workers (search for 'Settler-pump' on CFC for more information.)
I settle in approximate 'rings' centred on my Capital, and generally work on the principle that each new city needs a unit to guard it, and a Worker to improve it. As each new 'ring' around my Capital is (near) completed, towns further in should concentrate on growing and building units (and then improvements). In the early game, units are usually more important than buildings: if you don't build much/any military, you're going to end up looking very weak to the AICivs (who will generally build two defenders per city, then start building attack-units -- even if only Warriors and Archers). A good guideline in the early game is to build mainly/only attackers, with
maybe 1 defender per border-town, and to check your military advisor (F3 screen) every so often for his assessment of your immediate neighbours' strength (or not).
Once you have an adequate military (defined as mil-units, not including Workers/Settlers = free unit allowance), then you can start thinking about improvements -- but while a town is still below Pop6, aim to build
no more than 1-2
useful improvements, based on the town's need(s) and strength(s). For example, growth is king, so 'Ducts will definitely be needed in dry towns. In towns which will have >30% corruption/ waste (e.g. if the town is producing 3 shields, but 2 are wasted), it's usually worth building a Courthouse before you do anything else. Then the 'extra' improvement might be a Gran in a food-rich town, a Barracks in a shield-rich town, a Lib in a high-commerce town, etc.
I make contact with other Civs and usually they are friendly at first, trading technologies.
Because at this early stage in the game, they won't have built much in the way of military...
But pretty soon they start making demands for technology, and when I don't capitulate, they attack me. In most of these games I am a match for any one enemy Civ but often get attacked by 2-3 at once. I often am able to sack several of their cities and win a lot of fights, but they just build more and keep coming.
Two things to say here:
(1) They start bullying you because you appear weak, most likely because they've built more attackers than you have -- and once they go to war, they
only build attackers, so if you've got too many towns hung up building improvements rather than units at this stage, you're at much higher risk of getting overwhelmed. And the more units/towns you lose, the weaker you'll appear, and the more likely you are to get 'dogpiled' by the rest of your opponents. When there's blood in the water, it attracts more sharks...
(2) If someone attacks you, but you successfully counter-attack and take towns, you can usually make peace fairly soon, and possibly also demand concessions (in order of increasing value: their gold, their techs, more of their towns) from them instead. But if you're losing a war, it's better to lose gold/tech-advantages than towns, so make peace with your attacker as soon as you can, even if you have to pay for it -- before you get more AICivs pitching in against you. If things go really pear-shaped, and you start losing the war before you can make peace with your attacker, it may be worth buying in an ally or two, so that it's your attacker who's obliged to fight on multiple fronts, rather than you.
CAVEAT: Signing alliances will put your trade-reputation on the line: Trade-reputation breakage lasts the rest of the game, so if it's important to you, you'll have to hold to the alliance until it's over (either reached its 20-turn limit, or broken by your erstwhile ally(s)),
before signing peace with your attacker.
Am I supposed to just give them the tech? Cause I feel that if I do, they will just get even stronger and I'll be less able to resist them when they attack.
This is kind of what I mean about playing like it's Civ1. In Civ1, the AICivs would almost always turn (that tech) against you almost immediately, so defiance was often (always?) the best option. But in Civ3 there are penalties for deal-breaking (which admittedly don't always discourage the AICivs from doing so, but it
can help reduce the frequency of occurrence a little), so bribery/ concessions
can be useful for staving off attacks, if you're not ready for war. By caving to a demand, you buy yourself some breathing-space, which you should probably use to build up your forces, to discourage further demands -- or to allow you to bully/ attack them instead.
In general in Civ3, since techs have 'fixed' costs (rather than depending on how many you've already got, as in Civ1), and since you need to acquire all the 'obligatory' techs in order to advance in eras, (tech-) trading is necessary, both to keep on good terms with the AICivs, but also (at higher levels) to keep up with the tech-race.
And at Warlord, you should be able to out-produce
all the AIs by a large degree. Don't let yourself become a soft target, and you're less likely to receive the ultimatums in the first place. (You can make them instead!)