What about diminishing returns for lots of fiefs?We do not give lots of free soldiers to AI, only about 10 free soldiers when they first spawn. It has nothing related to our problems. This is nothing big.
I am not fan of AI cheats and try to remove as much as possible but we have to give passive XP to NPC parties because player party and NPC parties so different in lots of terms. Player make more battles compared to an average lord party (average lord party life (time between spawned - prisoned) is less shorter than player party) and if we do not give passive XP as AI cheat 80% of troops at Npc parties be tier-1 or tier-2. This damages gameplay so badly, we have tons of troop variety but we cannot show them to player. With passive XP cheat this ratio (tier-1, tier-2 troop ratio) reduces to 50%. I want to reduce passive Xp more but I fear to damage gameplay especially at combat side.
You suggested increasing fief income but lets examine a test from 1.5.8 results :
As you see total kingdom budget is 8000K at 1084 (game start) but it rises 30000K at 1104 (20 years later) so this shows we already have a money inflation at world and as you see kingdoms with high number of fortification (Khuzait, Vlandia, Aserai, S.Empire in sample test) have high money inflation. Increasing fief incomes will make rich kingdoms even richer and create new problems and make money inflation worse. Reducing loot income can be one solution but these lords mostly do not earn money from looter loots already. Loot is income for everybody while fief income is income for mostly powerfull kingdoms. Already 66% of total income is fief income currently remaining is loot income. Increasing fief income do not solve our problem, Battanians have already 2 town 2 castles in total for last 10 years of test they already have limited number of fiefs. Making fief income 1.5x will give them daily 2000 more maybe while we will be giving 10000 more to each other kingdom. This will help stronger factions with bigger territory more and total kingdom budget of 30000K will be 50000K at 20th year.
Simplified, currently income is pretty linear, 5 fiefs give you 5 times more money than 1 fief. If you add diminishing returns you would buff smaller kingdoms.
This might sound artificial at first, but it's actually realistic. More territory means more costs for administration.