Glad to see a developer comment on this.
As for war and peace, kingdoms should be VERY reluctant to start a war if they're already at war. Kingdoms should be somewhat reluctant to start a war against a stronger rival that's at peace, but considerably more willing to wage war against a stronger rival that's already at war with someone else.
Basically in my opinion, you should end up with two opposed mechanisms for long-term game balance:
1 -Snowballing - The more villages and towns you own, the more troops you can recruit, with recruitment from non-owned locations severely reduced. The villages and towns should replace those volunteers gradually, so a lord can't recruit more than one or two volunteers from a village that's just been recruited from a day ago. Replacing troops should be fast and easy....once. After that, it should be increasingly difficult to recover quickly, until the garrisons have been refilled and the villages have time to regenerate volunteers. Snowballing should get less "efficient" above some point, so a large kingdom is more powerful than one half its size, but significantly less than twice as powerful. Offensive operations far from home should have trouble replacing casualties (need to return to friendly territory to recruit replacements), while defensive operations should benefit from being close to home, allowing defenders to come back with a second army in a relatively short time. Beyond that, after a major castle or town assault with high casualties, the attacking kingdom should be "tapped out" and try to avoid hostilities until they recover, ending wars if possible. Clearly, Bannerlord's kingdoms are not taking time to recover before beginning another siege (or war), and apparently don't need that time (due to not suffering a lot of casualties in the assault), allowing the faction that bobs first to continue steamrolling castle or town after castle or town.
2 - Ganging up on the biggest threat - Rather than random war declarations, the AI should prioritize declaring war to recover former territory, or to take territory from someone who has a weak claim to it by way of having taken it from someone else recently, versus taking core lands from a country that's not been a threat. It should be relatively unthreatening to take a single border castle and grow slightly, but difficult to grow to significant size without having the other countries begin to target you for "cutting down to size". Alliances against the biggest threat should also be possible for both the player's kingdom and the AI. The growth of large empires has historically resulted in the formation of large surrounding empires or alliances to oppose them, often resulting in the collapse of that large empire. There is no equivalent "anti-blobbing" mechanism in Bannerlord.
Aside from that, mounted troops should receive an auto-resolve combat bonus in FIELD combat, but NOT in sieges, otherwise horse armies become too powerful where they shouldn't be.
