Currently, it seems that any random peasant with the right backpack can go and start a new settlement anywhere he or she wants. I thought the whole point was that you needed a channeler to bring life (or death) to the wasteland so that civilization could grow? The current model not only leads to city-spam, it makes the sovereign redundant.
In some of the earlier beta builds, the player needed to spend essence to found cities outside of their current influence, but still needed a "settler" unit. What if, rather than "settler" units, new cities were created by a spell? It would need to be available from the start, and would cost essence rather than mana (and possibly only be available to the sovereign, rather than any spellcaster). The spell would be something like "Imbue Land," and for fluff purposes would basically be a way of bringing life to the wasteland, allowing living things to grow. The life would slowly spread out from the source point, and people from the wastes would come to live there. From a game mechanics standpoint, things would function basically the same way they do now, but cities would be created by magic rather than by an easily trainable unit.