I'm not keen on the idea of conscripting an army, but I like the idea of pulling leader figures from citizenry. Hinterland had a neat tradeoff between having a guy at home in his house doing something useful (alchemist, blacksmith, whatever) versus bringing him out into the field with you to adventure.
I think Age of Wonders might have had something along those lines as well where someone sitting in a city could cast spells that affected the overall board, but I can't recall.
King of Dragon's Pass didn't quite have that concept, but the council you had was abstractly pulled from the citizenry and the fact that each had their own skills and bias was quite interesting.
Well, most of your army is conscripted at some point. If you're making troops, they come from your population and get trained up. A millitia in this case is effectively just a rush build of troops: give them gear and don't train them. Normal soldiers would have training, so you'd use a lot fewer people to get the same effectiveness.
I really like the idea personally. I've always hated how a single archer can conquer a city of 5000 people somehow, and this way if you have the weapons to try and stop that, you can (at a heavy cost considering that people are valuable).
AoW 2 did have that, but it was your wizard (ie you, the sovereign). There was no other unit capable of casting overland. If your wizard was in a wizard tower, your heroes would create a little pocket of your range around them, letting you cast anywhere they went.