I was thinking that the fantasy genre offered interesting possibilities for diplomacy that parallel in Gal Civ what were neutral civilizations or City-States in the Civ games. The idea would be to have "factions" based out of monster bases, like a giant camp or whatever, that expand diplomatic options. They don't try to win the game. They may have varying other goals (unlike Gal-Civ and Civ, monsters as neutral factions are nothing like humans and they can do and want crazy, interesting things). Here are some ideas I thought of for the interactivity (the more creative ones came later in the list):

1. They can be bought off to attack another sovereign's empire. This doesn't have to work like declaring war, it can instead just be a set wave of the monster type attacking the nearest city. Sovereigns don't expect monsters to behave like people, so there doesn't have to be a war state necessarily. Likewise, the monster faction doesn't always have to mind if their sentries are slaughtered by a sovereign faction.

2. They can be bought off to not attack (sort of like a an open borders agreement).

3. They can have peculiar dialogue and negotiating tactics based on monster type (ie. demons may only value citizen sacrifices or hero corruptions, or giants may be stupid and value worthless  objects but are also prone to reneg on agreements, some superstitious race may be attracted to certain kinds of sovereigns (empire or high death magic))

4. They can have relations among each other more than with sovereigns (the werewolves may be more interested in killing the vampires than anything going on in the exchange of empires in the sovereign wars)

5. They can have boss monster type leaders (fun to fight, maybe you can win an alliance with one and the boss monster is a joinable hero)

6. Makes the dialogue/negotiating skills and traits more valuable, so it makes silver-tongued sovereigns more interesting and viable.

7. They can offer quests that affect relations and/or offer rewards.

8. They can factor in to random events, where new monster factions pop up or suddenly become very powerful or aggressive.

9. Some weaker monster faction may have a resource that is rare or otherwise unattainable, so brute force may not be the best way to sidestep dealing with them. They may be protected by other sovereigns. This is the other side of number 3, they may have resources or be able to make deals that are peculiar to the sovereign they are dealing with. (eg. A coven of witches may make otherwise unattainable elixirs, which boost stats permanently or give enormous power for one battle, or can teach spells that you can't find in the game (move some of tech spells here maybe))

10. Dragon diplomacy. Seriously. This would be fascinating. Just threw this in there.

11. Most of the resources are already in the game, maybe take the monster bases out of tech's and make it all diplomacy, which is more interactive and in my opinion could be more fun. 

Edit:

 12. The diplomacy score board seems to go one way, an ai lists its greivances against you. Now the AI factions are limited in how they can give you grief, declaring war, building in a place you want to be, ect. Monster faction relations can come with drawbacks, the witches may kidnap children from a city drastically increasing its unrest (special event). Now the sovereign has an interesting choice, put up with the witches screwing you over a bit, or wipe out the witches and lose access to their elixirs and spells (point 9). Bandit factions can rob you, and their chief may play dumb about it. The choice is kill the bandits and make sure they never screw you over, or live with the bad behavior and keep their spying ability which gives you an unnaturally wide active view of an enemy kingdom (to see troop movements and maybe wandering questgivers). 

Wandering questgivers would be a cool addition! They could be mini-diplomatic events, a chance to buy a spell from a wandering warlock, or to buy a rare idol that a dragon may covet. Not just quests, but interactive opportunities. They can spawn in zones that are cleared and make them interesting again. A wandering wizard may be a faction, he has some resources and can trade, but he may set up a tower and spawn golems that can be a headache.

Wandering Important People- This just elaborates on the wandering wizard idea above. Some people, maybe a great sage or eternally cursed human (like the Everman Berem from Dragonlance if you ever read that), can be found and have their own interactivity. They can be like factions, but people that either offer a service for some price, or occasionally offer you a deal after you meet them and come on good terms with them. They might just have information that is useful or they may be able to increase relations with another monster faction or teach you spells if you become famous enough. 

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That is a lot of interactivity and possible complexity. One virtue is that it mostly broadens rather than deepens the diplomatic scope (the work may be like 2x or 3x, whereas text-adventure style dialogue additions to existing sovereigns may be like x^2). The interactions with each faction can be limited in some way, so the problem of dealing with 6 AI and 20 monster factions doesn't turn the game in to flipping through diplomacy menus. They can mostly work the interesting content with the Hollywood principle, while only the more boring relations are player-initiated (unless lots of time has passed, ect). 

The biggest virtue is I have never played a fantasy TBS with such a system, and I can't imagine a fantasy TBS that is more suited for it. The world would be more colorful and interactive than any other fantasy TBS game I have played. You can't add this to MOM for sure.