For the sake of balance I'd say random chance to loot.  That way you can't get lucky with a fluke kill and take a full set of plate or a sword of wrath or something like that.

Like wiping a faction out wasn't reward enough .  But it is seriously annoying, sometimes, for the entire empire you just bested to completely disappear.  You'd think that a player could find a trinket or two.

agreed - equipment should be lootable - reason why a dead faction just disappears well - i also took that as - "all the channelers efforts to sustain the land (kingdom or empire) is suddenly gone - and everyone who now live in cities cannot gather food or sustain their existance this way - so they all scatter/fight and try to survive

this though could give a sudden influx boost of prestiege (limited time ) to all factions as suddenly there are hordes (depending on sixe of dead faction) wanting to survive in a city

yes and lets not go world of warcraft on loot - i still dont fathom how a wolf (normal wolf in warcraft) carries around a armor - was a funny moment(s) when weird loot appears-

make special loot kill a wolf - get a pelt kill a dragon get a dragon scale yay!

Ive picked up some items off random monsters, but never actually gotten to keep any, since i killed the monster without any champs in the stack the item seems to just vanish. Pretty annoying bug.

But the civ collapsing does make sense. No food for 3 months(1 turn) should be more than enough to kill everyone. Which makes me wonder how those neutral champs survive, just wandering the wasteland, what do they eat? or bandits for that matter?

true - mom ftw