Haha, nice city name, IronKaiser, and that's a good point. I didn't think about alignment, but that could very easily come into play. There could be some people with a Kingdom ideology, and that is why they sought you for help (if you're kingdom), while if you're Empire, then those with Empire ideology would turn to you for help. However, there could also be the ones who are neutral, who ask for help simply because they can't turn elsewhere, and depending on your actions, would turn Kingdom (if you help) or Empire (if you turn against them).
I think that depending on them being neutral, Kingdom, or Empire based, it would be interesting if they were unique, as in maybe, have a whole bunch of minor factions set up, and it's random which minor faction asks for help, for example:
Bandit town: these are bandits who are being beat up all over the place, and have nowhere else to go. They have banded together for security but now need a place to grow. The thought of a bandit town may be scary, but they assure you that if you help, they will not turn against you, baring, of course, you turn against them first.
Benefits: they periodically give you supplies and such, seeing as their bandits roam the worlds and steal caravans which end up leaving materials for you to take (double benefit, it seems). They can give you any kind of supplies, from gildar to crystal, seeing as they don't have to mine any of it. They just... get it from others.
Monster town: these monsters are feeling beat up and want a place to just live in peace. You can provide a place for them, where they will field an army of monsters in your defense if need be (by sending allied monsters roaming around your territory like it normally is right now except they don't attack you and attack enemies instead).
Those are just a few ideas of unique minor factions which you'd want to keep on your side. However, taking over the city loses those unique benefits, as the bandits would disperse again, leaving you with a normal city, and monsters would turn against you again if you crush their town.
Furthermore, perhaps a side benefit would be the more minor factions you help, the more minor factions will come to you for help, meaning that over a long enough period (thousands of turns maybe), you'll have a protective barrier of sorts from all the minor allied factions who spawned in and around your territory which also actively defend against enemies.
Of course, we probably need to think up some good advantages for taking those cities after they form, because there seems to be too many good benefits leaving them be, and it won't be much of a choice. Minor faction cities should have some special property in the city you capture, such as monster town, if you enslave the populace, you can train spiders and other monsters for your service (perhaps at an increased cost), and etc for bandits and others.
Thanks for the reply, Grizzyloins, and those are good examples of minor factions that can provide unique benefits (elves, dwarves... etc). Having them interact and grow like your ant hive example is a great idea! I too would like to see things like minor factions helping another minor faction grow in return, or even expand themselves, to become a "major faction" by building more towns and influencing the land in many other ways. So far, it seems that all the benefits are for letting a faction live, because you can get the benefits of diplomacy with them, or you can take their city with unique benefits. So why not let them live? However, let that ant hive grow too much, and you'll have 30 hive cities across the continent, taking all the resources, growing in power, and growing to conquer the major factions eventually.
Let the bandits grow, and you'll see bandits increase ten-fold, many of which don't care about you and attack you anyway, even if the city's diplomatic stance towards you is great (because the ruler of the city likes you, but his people steal from whoever).
Similar to monsters, let them grow, and they'll swamp the land, unleashing more super monsters than any party of adventurers, and unearthing titans and whatnot accidentally, causing a huge growth in high level monsters who will attack you because they're in a bad moon after being woken up by a large party of travelling trolls.
And watching all this happen would be cool, especially if your allies are the ones dominating the world.