The current territory demand undermined the concept of sovereignty, It is brilliant to use sphere of influence to simulate colonial expansion, but this would make early expansion too easy. Game often gets “undesirable”(from my point of view), around medieval with two or three huge empires subjugate bunch of stateless player struggle to survive (then what is the point of ten players game if more than half of the AI players couldn't even make through medieval), what is more unpleasant is that when I lose that city to my enemy I do not even get a single grievance to take it back. French invented Revanchism over Alsace-Loraine, taking back lost territory surly is a rightful casus belli.  

  May I suggest adding territory de jure system and revanchism to the game?

This is how I imagine it:

 

De Jure/legit territory:

At the end of each era, the territory of the empire gained in previous era is considered to be legitimate territory of that empire in this era. The empire will have a claim to those territory if they lose them in wars. The claim will last till end of this era. However, it would eventually weakened through times: while strong claim served as regular grievances and demands, the weak claim(after grievance timed out) provide players “Fabricate claim” option (through spy unit) as way to strengthen claims. 

 

De Facto/right of conquest:

The stability of conquered city will largely depends on cultural influence and army presence.

If empire could quickly spread sphere of influence to conquered city, the stability will raise in  large scale, and function as normal city. If not, the city yield will be massively downsized.

 

Revanchism:

Revanchism happens when aggressor carved away the capital city or legitimate territory of defender. Speaking of which, the capital city aren't suppose to move that easily during the war. 

Incident:

National humiliation:

It is the end. Even the strongest soldier among your army weeps. People are yet to know, they are anxiously waiting for the news. As the leader of the empire, you have carefully thought through what your are going to say about such bad news:   

1)revenge is a dish best serve cold(Homeland) 

Revanchism:

+10 war support, +2 combat strength against occupier each turn until city reclaimed. -1000 fame 

2)we must make peace with it:(authority)

Rational concession: 

-10 stability(15 turns), -100 fame(5 turns), +10% city yield(5 turns).