I don't really know how minor factions work in this game, as I haven't gone deep enough to be honest, but I think it's all limited to diplomatic benefits.

What if the minor factions brought unique bonuses, technologies and ships? Something like the minor factions in Age of Empires 3, or the warcraft mercenaries.

Example:

For those who don't know the game, this is a way to take better advantage of the map in your favor, since these settlements usually have unique benefits. These buffs are accessed by building a trading post at said location, and you can then research and craft their units and technologies.

Units trained here do not take up population space, but have a creation limit. In case of being ships, they would not occupy logistic space, but they would have a limit.