Earlier in the game Ythril captured Deorcynsse. After a while Ythril declared war against my peaceful Pariden Kingdom, and so we decided to teach them a lesson by capturing this fabled city for ourselves. Having now done so, I discover that the city is ... level thirty-one (31!) and has 150 pop to go until level thirty-two (32!)?
Seems very strange. I am playing on the Wildlands map, no idea if that is impacting this or not.
Screenshot is here, and I have attached a savegame from just before I sacked them. https://dl.dropbox.com/u/59771612/FE%20Pics/Pariden%20Wildlands%20Kicking%20Ass.EleSav

[Edit] As a bonus note, the wildland is still unconquered even though I own the city. This is really annoying because I cannot make my territory contiguous (unrest penalty!) or take advantage of the various shards and other resources within the area.