As the title suggests, I would think to add further variety or customization to the game. Allow each faction, or the additional option of having a "religion" or affinity for certain shards or elements. Or even take some of these ideas to make additional factions in the game. Be it as a bandit, monster, or insect hive race or what not that plays the "big annoying bad guy" part in the game.
So occasionally for example randomly in a game, a bandit\monster faction will form itself and start causing havoc and be another threat the factions will have to form a alliance to fight against and save themselves and the world. Or it just be an annoyance that randomly attacks whoever to cause distraction and trouble. Or even have some silly adventures that cause trouble and end up getting possessed\mind controlled\overly greedy and start there own faction to cause havoc. This could also curtail the random monster spawn and give it more direction and more purpose.
Also as someone else mention, would like to see the option of factions coming back later after they have been defeated. Due to some random magic, lost child, etc. Could even have followers of the dead sovereign use some lost death\Titan magic to bring the person back as an undead lich. Maybe that could be how an undead faction gets started in a game.
Landscape effect for the area with in your influence: Instead of just what the Empire and Kingdoms do, have an option to have it change the land to snow and ice, along with other effects. If you are fighting with in your own influence, you are more then likely fighting on your preference for terrain type and it grants bonuses to certain units you have.
For example: You are a faction that favors cold with unite types like ice demons, ice giants, etc. They have increases movement on your snowy lands. Perhaps even increased health regeneration.
Perhaps have your channelers even being able to summon different types of creatures based on the factions preference type for land. So the if they are by lava tiles, they can summon a fire elemental to help defend the land. Or Cast a spell on a living area to summon earth elementals to help defend the land against an attack.
Or even be able to research a spell or something that allows your land to spawn creatures for defense when a enemy army is on it. For instance for every three cities, the land will spawn an earth giant to defend it when hostile forces show up from another faction.
Have shards effect the landscape themselves. For Example: Fire Shards will cause blacken\lava like terrain around them, and fire elementals, fire imps, etc. to spawn by them till you have captured them as a resource and sealed there powers up for your own use, etc.
Also think it be better if the sovereigns don't start with many if any spell books and it be something you find through research or adventure. More like how the campaign has Relias doing. From my take of it. He didn't realize who exactly he was at first.This would go along with each spell book having its pros and cons. So if you started by fire shards, you can go that way, and concentrate on fire related tech and powers.
Definitely needs to be advantages to the different spell books, and rewards for being more specialized instead of being a generalist in what spells and powers you have.
Think you should have to have "life" to get the better healing spells later, or "earth" to get the more advance landscaping abilities such as earthquake, volcano, creating mountains, etc.
All these things could give the world more flavor, and make the game more funner. As well as diversify and make each faction more unique since they are all basically human in origin.
Also on a side note, would like to see some sea creatures, sea trade routes, etc added. Be easy enough to add that I would think. Just be a coastal tactical map, or just one big blue sea tactical map. With units appearing to be half submerged as they swim and fight. Or float on the water. Perhaps expand it out so ships can be customized with what type of crew they have on it and what weapons they would use in a fight.
(Okay, this turned out to be more of a random idea thread then on one set of subjects)