Each to their conquering own!
A way of creating that cap is through essence - unless there is another mechanism you can think of that makes sense narratively - ie in the game world?
In sins it was around logistics - you needed better supply and such to be allowed to build more ships. What are the limiting factors in elemental?
I would have thought the essence mechanism is the best way to go. Reduce starting essence on a sovereign to 3 and then allow them to increase it again through resources and/or research.
Well it is essentially just the one person ruling over all these cities, and it could be said that beyond a certain point they simply wouldn't be able to maintain control. There aren't really any governors or nobles ruling over their share of the land, it's just the one sovereign (or you) with total control.
That actually sparked an idea. So the sovereign can only control 3 cities at first, as that's all the skill they have at city management. With training and research they can increase this slightly. Now back to capturing enemy cities, instead of taking over the city and directly controlling it, what if the sovereign installed a governor or something. The city would become an allied city controlled by an AI, and this same AI would control all cities captured from the same enemy. So if you wiped out 3 enemy kingdoms you'd have 3 governor AIs controlling their kingdoms allied to you. This would be more than a normal two nation alliance, as the sovereign would be able to order the governor around instead of simply asking them to do things. This expands your strength but doesn't add to micro management or bog you down with correcting the enemy AI's mistakes. Technically that is how kingdoms really grow, so it makes sense to me. I have a feeling that's beyond the scope of what can be changed at this point though.
As for essence, I don't think it would work without changes, I have a feeling a lot of the spell system is going to rely on essence. Most likely all the really powerful spells are going to use it, then there's events like the wolf one that can subtract a large chunk. If you required essence to make every city and not just the ones on dead land there could be that option of building a lot of cities or using some really powerful spells and I think that would work great as long as the spells didn't take up like 5 essence each. As is though you can just wait until the land grows around your current cities then expand from there.