In my opinion, diplomacy is the weakest part of the game so far. By postponing alliances to the very late game, we are missing the opportunity to create pacts early, the same goes for weak civs paying powerfull allies (and making it more difficult for player to sack them). Trade etc. treaties are a single sided must, without any cons except money cost - e.g. trading with enemy of civ A could worsen relationship with civ A? Something like "You are trading with my enemy!" penalty. That would make such decision much more interesting, creating trade pacts of befriended civs... Of course penalty could be mitigated for Diplomat sovereigns.

AI breaking pacts when it should not is and old story... I at least hope they make this option for player as well and would give that an INFLUENCE COST, making this resource once more viable. Again, different setting could be for Diplomats...

These are few of my ideas, but it definitely needs tweaking....as far as I think.

There isn't a lot of incentive to be diplomatic unless you want to set up caravans, there is a lot to be said for going it alone and not helping the AI players by giving them something.  It's a lot easier to be aggressive and unfriendly to them than it is to be nice.

Thanks for the replies. I now know not to pursue Diplomacy in this game for the time being. I saw that for 1.1, the AI is being worked on, so hopefully Diplomacy will work when that patch goes live.

I love diplomacy, it's a good source of cash for me, and it lets me end wars and/or the game without having to chase sovereign's down to their last town.

This is my attitude to diplomacy in this game and I have grown to like it.  Don't trust the AI to hold to treaties they only respect your strength. View treaties as restrictions on your own options but not on theirs.

If you want to be safe against treachery build up your faction power.  Recruit troops and champions and level them up and the AI will not (usually) attack a stronger power, at least I haven't seen it do that yet.

Once you are stronger than some of the AI factions they will want to form a Non Aggression Pact and will pay for the privilege.  Then use that gold to set up the economic and trade treaties.  Only do this with weaker players and then you get the full benefit as long as they survive and these treaties give 10% more gold in your capital and 10% more gold overall and that soon builds to a nice surplus each turn.  This extra cash easily pays the increased maintenance of the extra troops you had to build to become a stronger player so don't worry too much about the financial implications.

When you need even more cash sell off your research or surplus resources to the weaker players or to a faction that can't use the resource well (e.g. sell ore to Resolyn whose trained troops are weak and who doesn't research warfare techs much).  Make sure the trade partner has at least 250 gold before selling a lot of techs or resources and they will value gold at the normal rate instead of counting it double.  Just use your own gold to buy something useful until they have 250 gold and then clean them out selling whatever junk you have for their gold.

The other AIs are a major source of resources and tech once you know how to manipulate and milk the system. 

JJ

One of the main problems I find with diplomacy is that, while in early and mid game you may not need too much of it, because you are very busy dealing with monsters, in the late game, there are almost no monsters, only the AIs left. All the weight of the late game is supported by the diplomacy, and it is then when it fully shows all of its weaknesses.

Unfortunately, it has a lot of weaknesses: bugs like the city insta-razes, weird research points trade system, AI breaking NA pacts, ... and lack of options that would give a bit of more depth to that late game: trading cities or units, resource production pacts (like the gildar pacts, but with resources), open/close borders pacts, ... the kind of things that would encourage the player to develope alliances to avoid long conquest games...

Diplomancy in this game well to be blunt it sucks. Really needs an overhaul but I doubt it will happen.  I've gotten to the point of just ignoring Diploymancy all togather since it brings nothing to the game.

When I outpower my foes, I love negotiating non-aggression pacts and trade pacts and so on with them -- I drain them of their coins, I get to focus on my own priorities, I get various benefits (I do not bother if I do not think those benefits unfairly benefit me).

I do not know if it's because I play on epic pacing, but usually after a few rounds of non-aggression pacts they are all broke and helpless, while I've been building up my own strength, and the trading pacts also help me... sometimes by impoverishing them I am also keeping them from destroying each other, which is sort of funny.

This is not possible when they have insane AI, but when it is possible it works well.