If you level up your sovereign through combat you'll get extra essence that you can use to build more cities.
You actually don't need essence to build cities in some cases. Your cities spread livable land throughout the area of influence, which is dependent on the prestige of the city and its population. If you build a city at the edge of this area of influence, you don't need to use essence (livable land has a faint green tinge). Currently, the only way to increase prestige is to build housing. Also, when you kill an enemy sovereign, any cities that he still controls disappear, but the land remains livable. One tiny exception is the area around a water crystal, which has a faint blue tinge and resists the incursions of livable land.
Considering that maximum mana is dependent on essence, I don't think spending essence will be the way ultimately to play the game. Unless there's a way to restore essence later.
I should add that I've managed to get up to 24 cities through this method.