Here's a screenshot annotated with a few issues I have:
http://img824.imageshack.us/img824/7806/understandnothing.png
Now there are many problems shown in this single screenshot, and a few more hiding nearby.
1) (doesn't show). The colors for Luhjahn and Iyana were similar, but separate.
2) That Valdiri guy was in Luhjahn territory. I thought he belonged to them but no. I wasn't offered the right to enter their territory but he did. Maybe he has the tech for Rights of Passage. But he certainly didn't sign one with me. Neither did the Olithar guy up there in my territory, who belongs to Iyana.
So: What are those guys doing in someone else's territory without right of passage?
3) Since I'm at war with Polapel (a mistake of mine, really), why can my sovereign coexist peacefully with their kiing in the same tile?
4) (Doesn't show on the screenshot either). Why are the settlers of Luhjahn still there on the diplomacy screen when they look pretty dead to me, what with no territory? Ok, maybe there's a hidden unit somewhere, but I'm suspicious.
5) When I conquered the city, I found a spouse there. Whose spouse I don't know. I can't make much out of her, like marrying her, and I can't understand why she'd serve me either since I just invaded her country. She should be dead.
6) It is IMPOSSIBLE looking at this screen to GUESS WHO'S WHO. Do you have any idea whose faction the guy northeast of my town is? Neither do I. On the cloth map it's somewhat more clear:

But not that much. It's small due to the zoom, crowded, and you can see the weird artefact of my sovereign red in the middle of the blue on the southmost character.
I'm sorry, but I don't know how to see whose faction a character belongs to. The cloth map is mostly ok for this, but it's unfortunately impossible to zoom in on the cloth map, we get the hard-to-read 3D map when we get closer.
It would be nice to get a HUD on the UNITS, not just the cities, so at least you can know who's whom and which faction each unit/group of units belongs too even in the 3D map.