Diplomacy in this game is actually pretty good.
I'm a huge game theorist and love screwing with the AI to manipulate it to ultimately aid my victory (by offering it logical short term gains for seemingly neutral "costs", which I design to create a web in which I come out far ahead overall when all other AIs are considered).
I think this game strikes a brilliant balance between an overall hyper-logical structure (that characterize most game AIs), a small % of random decisions (much like rolling a 1 on a 20-sided dice; to keep things fun), and hints of transparency with deception, rather than 100% transparency or opaqueness. It's quite frankly imo the best part about this game. It's manipulat-able, but each interaction is a huge puzzle wrapped in a mind game where you have to analyze each civ's past actions, current positions, the hints you get about its current/future actions (love intrigue), etc., each time you make a move. And, if you do it exactly right, you can still bend the overall AI to your will and get 50+ turn notices of what the AI is planning to do 95% of the time. But if you mess up, or analyze wrong, the AI can really screw you. The problem people have with the AI diplomacy is that the AI is too GOOD at it (i.e. better than you, screwing you over), the opposite problem as with the AI's military strategy, which is simply awful (i.e. worse than a 5 year old, screwing itself over).
Some of the diplo weights are a bit off kilter in terms of how they reflect reality (or at least my perception of it), the warmonger mechanic is heavily broken with city-states (but that can partially be justified by the game's desire to keep CSs alive), and AI still doesn't take %chance to war into account in its trades, but the overall structure is wonderful for replay-ability if you don't mind paying attention.
Although, I can 100% see how someone who's not good at game-theory analysis, or playing the game very fast, or not observing the AI's actions (and diplo text) in relation to its past actions AND other civs, thinking that the system is much more random/finicky than it actually is. If you ignore the tools the game gives you to conduct diplomacy, then you're just not very good at diplomacy. In CivV, diplomacy isn't optional unless you're a total warmonger.... diplomacy is vitally integrated into every other play-style and victory condition, and most people just do not pay it the attention/respect it deserves and suffer for it as a consequence.