I don't think we need/ought to forcefully balance settlements. The applications gave incentives for hard work, but it also let settlements keep their independence. I want to lead a settlement/clan next map. Do I want to lead a huge clan that's fighting and has a million different ranks? Certainly not, and I'm sure I'm not the only one! Quite a few of us really just want to go build small settlements and not be bothered with everyone else's politics.
Also there was plenty of competition in JtE, from the Snowfall-Crucia Conflicts to Wold War Elysium. Outside of actual fighting we had raiding and membership rivalries, trying to keep your players together via organization and events. I haven't hit a single player in JtE, but I've certainly participated in some competition! The race for Second City is a good example of peaceful competition.
And I'd say that everyone from the newest village to Sancti itself can take pride in the work they do. You don't need a big group to be proud of your work!
You will feel like you are a part of something, you can divide the leadership up (North, South, East, West, Underground etc.) You will have a higher appreciation for the work you put into the city as well as the work other people put into the city. There are so many options and ways you can run your city and the players choose how you shape it. You can create sub-towns off the cities and establish ways of transportation to them. The players can build their own projects and be creative as they would like. The JtE conflicts were pretty weak anyone last map knows this there was no real fighting. Also Sancti did something that I explained about being creative with your town to protect citizens and that would be the Sancti Secure Nether Network. The race for the 2nd city example would translate into which city can be the best and work on their buildings, size, and fighting to prove themselves.
We can
already shape our city, divide up leadership, have projects, and have smaller settlements subservient to larger ones. How I run Sancti is probably
completely different from how jackamel runs CTY. Nearly everything you stated is something that could already happen with our current system! The only thing that would change is
we'd force everyone to either participate in the big clans or not have any clan involvement at all. This system is great for people who enjoy big clans and want to participate in wars and diplomacy and whatnot. Even my smaller settlement will be involved in politics a little.
But not everyone wants to join huge clans. Look at Camelot or Port Fisk, they've both been villages since the beginning of the server, and they're quite happy to stay there! It's great to have that diplomacy and politics, don't get me wrong. It's just not for everyone. Sure, you may argue that not everyone has to be involved with politics just because they're part of a big clan, but when World War Elysium broke out, it wasn't only the leaders getting killed! I can cite at least 5 Nomads/Settlers who, while having no leadership or knowledge of the course/purpose of the war, were killed due to them being members of a clan.