There's been something for a while that prevents you from building over plots that have been razed. Basically, if you don't beat the AI to the pioneer rush you either lose the spot entirely (Razed) or have to deal with the conquest penalties.

Eh, I had the opposite happen.  AI took a city and before I could recapture they razed it.  Couldn't rebuild due to lack of grain there.  Would've had to "reclaim" that area as an outpost.  It's a bit odd to me but I guess it must be that way to prevent some kind of abuse I would never be doing.

Hmmmm, i would think the fact that I just destroyed a (halfway decent) city would be penalty enough, anything I rebuild would be starting from scratch, but I guess the design decision kind of makes sense.  I have to ask though, what is this spell you speak of?  Maybe I can find it if I search a while.  Also, thanks for mentioning the spell, I was about to be really pissed at that design choice, but the spell redeems it, in my mind.

I fail to see how completely rebuilding a city and growing it from a blank slate is "cheating". As I recall the point of placing Unrest penalties was to make conquest less of a benefit than building everything yourself (and stymie some of the streamroller effect)... which raze-rebuild doesn't contradict.

Hey, jumping back to this post after a few weeks away.  Seanw3, as always, you have some awesome ideas.  I would love to be able to unsettle a captured city, maybe even have it turn into an outpost (which if I then couldn't want, I could just raze that down).