optimal city placement

I don't think there is a simple X factor.

For maximum sprawl you want to be atleast 7 or 8 tiles away but then there are gaps in your influence where mobs can spawn and attack your caravans.

For maximum security of Caravans you want to be as close together as possible, 4 or 5 tiles away.

However, cities do not provide much of a bonus unless there are resource tiles near where you settle.

So in Elemental it makes more sense to settle near key resources first then fill out the rest of the map with small cities to extend your influence.

Another thing to consider is that larger cities have much larger circles of influence. One large city can cover the same area as 4 small cities. It will also cover the area more efficiently but while you are growing the city you run the risk of other factions encroaching on your territory.

I think the optimum solution is to place cities to maximize the number of resources within two squares of the city. That way you control the resources when your city reaches level 2. The AI seems to place cities right next to resources it wants to control.

Agree Zygwen, your city locations are going to greatly depend on the resources that are available.  Food and Shards being the top priority.  Crystals are also good.  I think gold and materials are the easiest to come by.  I go for food resources first because, if there is a location that has two or three resources relatively close, but no food, i still want to build a city there.  The extra food from the other locations is just going to have to pick up the slack.

I'm pretty sure the five tile thing is only for claimed resources.  Any resource within 5 tiles of city center will supply it's resources to said town and have appropriate multipliers added.  Also, you can build your town up to the resource, and the city wall expands to enclose it, protecting it from pillaging.  Resources further away still contribute to your empire, but don't have multipliers added.  E.g. a gold resource within 5 tiles can potentially provide 5 * (1+.2(level 2)+.3(level 3)+.4(level 4)+.5(level 5)+.25(market)+1(unique building)+.5(bazaar)= 15.75 gold, vs a flat 5 gold for one outside of it.

You also cannot build another town within 5 tiles of another.

Finally, ideally you're only building cities near resources; practically you may have to build a few fog-busting towns to keep the monsters from destroying your caravans.  There is no downside to this except the cost to build a replacement pioneer, as towns don't have maintenance cost (currently).

Assuming no resource node influence (it's ideal to link cities to certain nodes to make use of the level up bonus), city placement depends on how much you plan to "grow" your cities, this usually have to do with how much food you have available and what side (Kingdom/Empire) you are playing. Let me give a quick example (the numbers are off my head and might not be 100%):

A kingdom outpost can grow to a level 2 village with 1 hut (requiring 1 food), and to a level 3 town with 2 huts. To get to city (level 4), you need 3 food, but you need to have researched housing. If not, you would need 6 food. A level 5 metropolis needs 10 food and housing researched. At which point you can demolish the houses and use the food to grow another city (this might change later - it's really cheap). Depending on your available food supply, it's important to plan just how high of a level you want.

The level matters mainly because they generate different amount of influence (zone of control). A level 1 outpost with no huts has a ZOC of 2 (one tile away from the center), a level 2 village with 1 hut has a ZOC of 4 (3 from the center), and a level 3 town with 2 huts has a ZOC of 6, etc. So if you are planning to have 2 level 3 towns, the placement can be up to 10 tiles away from one another, and their ZoC would overlap and everything in between would be your territory, making it safe for caravans and eliminating monster spawn in the middle of your empire. On the other hand, if you're lacking food and city spamming villages (the caravan generated would at least make up for the 1 food needed to grow to level 2), then you'd want them to be 6 tiles away from each other. This is probably the closest that I would put them together though, and only in cases where you know you won't be growing the cities in question any higher, because otherwise you will find yourself without any room to build.

It's also important to note the pace of growth in your cities (prestige), you might plan to have level 5 metropolis everywhere, but it's takes very long to grow unless you choose royalty trait, and use buildings like capitol and theater. Even then, you'd often only have 1 or 2 metropolis in a game.

In my experience playing kingdom with royalty trait, 8-9 tiles away is a good number. It doesn't take very long to fill the spaces in with your influence and gives you plenty of room to build improvements without much concern. I've only played Empire a couple of times, so maybe someone else can give a better number for them.

any time there are 3 or more resource tiles (or 2 REALLY good ones) I'll build a city

Thanks for the input!  I've always been a big fan of big cities over a bunch of little dinky ones.  I'll try in my next game to go for 8-9 tiles of space eating up as many resources as possible.  I've tried to build a town in more or less a "mountain pass" type spot to prevent other factions from coming into my land, but it doesn't seem to be working so hot as it's too close to another town and I can't bloody well build anything there.

I might even want to start my game over tonight lol

The current city system is broken badly.  The optimal city setup is one max size city with at least one food source and a starting size city adjecent to every resouce you find. 

Don't build any housing in any city but the one you are going to max out.  Send a caravan from every city to this master city.

Once your master city is max size destroy all housing and pick another city to max out, rinse and repeat.

By the time you have 3 or more heros with 10+ essense you can cast one of each of the city enchantments on each city.

If you every have more then 10 extra food go ahead and turn another one of your min size cities into a max size city.

Sammual

If your city levels up to 3 you can legally destroy all houses because the city hub itself is then upgraded in capacity to hold all the current population and then some.
This is not an explot. It would be if you didnt have the space to house all your people after that...

That means you get irrigation from lvl 2 and... whatever you fancy of the lvl 3 buildings. With a negative food cost.

It takes some jugling to keep them switched over but such is the price of micromnagement.

Even if its completely legal, it's very abusable and feels really cheap, and thus FEELS like an exploit, especially since the AI doesn't do it. Even if you choose to, I don't recommend destroying your houses until you get to the highest level or unless you desperately need the food, because it takes turns to grow your city, and any turn that your city is sitting at max pop is a turn that could have been giving you those +40% and +50% bonus.

All this, plus fill all the gaps with more lvl 1 cities even if there are no resources.  You still get +1 gold/tech/arcane by building market/library/study.  1000 of these cities = 1000 gold/tech/arcane plus the ability to produce 1000 troops at once, if you want.

BADLY broken.

Lets see, things I have found that work:

• Spam them.  There is basically no reason not to.  Lock down every resource with a new city so no one else gets it.  As your central "keeper" cities expand in influence to encompass the resources, destroy the little cities.

• Spam them.  Just build cities everywhere, regardless of resources, to keep monster spawns back.  Upgrade them to level 2 with a hut and minor buildings.  They can crank out soldiers even if they're puny.  Since good stacks of troops can take a while, having 6+ junky cities cranking out powerhouse units at once can build an army to overwhelm the AI more quickly.

The other thing to consider is the "adventure" type upgrades seem to only add new resources in your own lands, so the bigger you can push your influence before you research those, the better chance you'll get some good (and plentiful) resource tiles.

Tactical Uses that trivialize the AI:

• Spam them.  The more cities you have, the more regions you can teleport into.  I have made a hero a caster and then given them a stack of pioneers.  I had them follow my sovereign, spamming cities at important choke points.  Then I can just Teleport in to defend it whenever needed.  Dropping cities all over the map also gives you the ability to teleport all over the place for any reason.

• An addendum to the previous point: Find where an AI is?  Drop a city right outside his/her sphere of influence, then teleport in your stacks of troops.  That way, you never have to actually leave your own territory.  You just sit home cracking out high level units and assigning them to channelers, then warp them all in on top of the AI and wipe them out in a turn or two.

One thing that is important to note is that the limit for resources and cities are based on the closest tile with improvements. Thus the radius that  city can affect is -not- circular and can be marginally bigger than would otherwise see.

A level 1 city with the 4 basic buildings (mat, gil, tech, arcane), will (assuming ZOC) connect to the following resource.

[C] [I] [I] [ ] [ ] [ ] [R]

Thus the bigger the city will ultimately be, the further away you can afford to put the city. I've been able to build a level 3 city that has grabbed all the resources that were ~6 tiles away in multiple directions. Using the same principle, I've built cities that have reached resources 10 tiles away in a single direction while still getting the nearby resources.

The main benefit is putting a lot of like resources into one city or grabbing single resources that don't modify well (a single farm does not benefit from irrigation). It's ultimately far cheaper as you also tend to not be spending as much money on buildings (among other things). While stopping monster spawns are nice, it's usually not a huge problem in the early game especially if you hire one or two champions. Monster problems only happen if you're rushing too fast - I've yet to have an issue with monsters even with 12+ cities (and still expanding) that are far more than 10 tiles apart. The monsters you worry about at later in the game... at which point your cities have grown enough to push them out. Especially if you have minor factions near by, their vision radius will also push monsters out.

Not to mention that having more champions brings you their benefits. The most important is that they artificially inflate your might rating; the game gives them more weight for military purposes. Thus by snagging champions like they're going out of business, I've been able to reach into mid-games with virtually no standard military while still having no monsters roaming around due to multiple stacks of champions (I generally end up with 3 to 6 stacks of multiple champions). All of whom are generally mid-level; due to stacking, I also eliminate the need for high level equipment. Later in the mid-game when units start to overpower champions, all that money I didn't spend on equipment for champions and hordes of units (and then some since I'm not supporting them financially either), I can use to immediately create unit stacks of high quality. And due to cleaning up wimpy monsters, I have enough of a surplus of gildar that I rarely want. When I do want, my surplus of other resources lets me borrow from others readily.

Also, as far as population, at the moment, you can 'store' population (if you have resources available). Since anytime you build something, it takes the resources right then, if you build, say, a pioneer, then queue up a bunch of cheap units, those population points will effectively be stored. Each turn, add more to the queue. Once your housing is done, you can cancel the queue to shoot them back into the city.

I really should grab some screenshots for the improvement thread.