I think you should reconsider the federations deal. I'd much rather see Civil War. That is, plop a player in the game that takes the split off cities, but is a variant of the mother civ. The two civs start out at war with each other, and what comes next is fairly obvious. Either a two state deal, or one takes over the whole country.
What's that? Englands's Great speaker wanted Autocracy and didn't get it?
Bam Fascist England forms and tries to take over England.
Sorry about the logo, I just threw it together for the purposes of this post.
how i maek circle guise
An even tougher issue. If the revolution wins... Should the player be allowed to continue the game? Should he lose? After all, his civilization didn't die, just his rulership. Perhaps two options "Continue Playing as Fascist England" or "Return to the Main Menu in Shame"
And then there's the issue of if the revolution wins, should it become a successor state to the old state? That is, inherit all of its AI relationships and all?
But yeah, I'm just kinda brainfarting here. What do you think of all this alex?
EDIT: I just thought of a method for determining how strong revolutionary sides of Civil Wars should be. Is your Civ happy? 25% of cities or less support the revolution. Is your Civ unhappy? 25%-33% support the revolution. Is your Civ angry? 33%-50% support the revolution.
Still brainfarting. I don't think you'll go with this, but I still think my idea was at least worth putting out there

I know it would be fun as hell having to put down revolutions and such.