The Faction interaction is getting quite a bit better, and in large part is in pretty good shape. however, it would be nice if the Faction AI chose to interact with the wilderness in a more meaningful way.
In terms of wilderness creatures, I would very much like to see a greater differentiation in how wilderness creatures are populated and in how they behave. The various types of regions should have characteristic creatures which occur with greater frequency
Bandits should spawn near valuable resources outside of ZoC, and should do so late into the game to represent those few stragglers who are choosing not to join any faction gathering together to eke out a living of the backs of setllers. They should pointedly prey on unprotected resources and weak units (pioneers, militia). Over time, it is reasonable that their tech increase to pace with the lowest faction's weapons and armor as it can be assumed to have become relatively ubiquitous.
Bears and wolves should be territorial, but try to avoid conflict with large groups.
Trolls should live near rocky features and build up small raiding parties over a few tens of turns, then "come down from the hills" in small groups to raid nearby soft settlements, outposts, and poorly protected groups of people.
Elementals are probably more Bound defenders, magically chained to locations to protect goodies from before the fall. They should be tough and have good rewards.
Death Demons should be enticed by conflict and be drawn towards area where there has been lots of war to collect the souls of the dead and dying. I would also like to see them be able to pick up their lairs and move if their current home has little conflict.
Dragons should live in remote places and only come out of the mountains to prey on larger cities to increase their horde.
Skaths should be ferociously territorial, but stay relatively close to their homes as there is likely no other primary predators in the area feeding on the near by fauna.
Admittedly, the above is a bit of work with the AI, but the amount of character and color that these types of interactions and behaviors would give to the world in general would go a long way to making the world a more vibrant and interesting place.