I am coming at this from some frustration from another game that butchered their own diplomacy system from previous iterations of their franchise... but AOW4 isn't a bad diplomacy system. It's a solid "It's Alright." from me. However, I think it could be better with a bit more... intricacy. Here are some ways I think it could be improved.
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Inter-player random events. We already have an amazing event system and one that works on improving relations with Ai factions, so why not create more inter-player random events that let us cozy up to particular individual rulers!
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Arbitration deals. Allow us to make deals with Ai to peace out or forgive grievances and such on behalf of each other. Always frustrating when you get along with two Ai and they hate each others guts and then inevitably you have to pick a side rather then being able to be a mediator between the two.
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Envoy units. A special unit that can be attacked by Empire Units outside of war (Unless you have defensive pact and above.) These units will passively increase relations with a faction in whosever borders they reside in. They have an ability which makes them immune to being attacked at all for 1 turn called Diplomatic Immunity.
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Research and Trade Treaties. Simple deals that cost some sort of upkeep. I.E. A trade treaty might cost 20 gold per turn but give each side +10% gold income. Research might do something similar, costing a flat knowledge amount but either offering a 10% bonus to overall knowledge, or giving a decreased knowledge cost on research the other empire might already know.
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Finally, I come to what I call... "Tome Pacts". This is a nice lil unique mechanic I like to think of my own creation. Each Tome should come with what I call, a Pact. This Pact is a special agreement you can make.. (Cont. below cause I'm running out of characters)