could it be related to workshop income being broken?
no i think it has to do with lords getting captured by bandits and not being able to rebuild their army once they got defeated. Secondly factions fighting a war against one enemy end up in stailmate situations once they are at war with 2 - 3 factions they end up losing territory very paired with that clans start to switch sides this adds up to the snowball effect where one faction basicly rules over all calradia.
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