As the system works now, more cities are always superior from a game mechanics perspective. True, the prestige (growth per turn) pool is split into more parts as soon as you found a new city, but wait some turns till the city becomes lvl2 so you can build an inn (+growth building) and you already get more growth out of the equation as a net sum.
Besides, you can enchant cities heavily, multiplying their benefit. You have extra build queues, aiding to overcome the artificial 3-turn minimum build time. You get more options to situationally respond to sudden threats (rush building) rather than needing to ferry troops from afar - and you also get some free, always-respawning city defenders whenever you get attacked that are meaningful during the earlier to mid-game.
In fact, the only reason I delay settling a new city is to scout a bit the terrain to see if I can fit two cities in a fertile patch. I often tend to choose to build two cities on each end of a fertile stripe if I can fit them in the 6-tile min distance, even if there would be a more fertile place in the center of the stripe - two mediocre cities tend to give more bang for their buck, especially considering how long it takes to level cities to the high levels and the lackluster options for special buildings you get each upgrade.
This all may change in the upcoming city-revision patch, but as it stands, more cities is definitely better.
