After reading this
I got a suggestion.Fiefs
Each region may be organised into one or more fiefs (eg Gondor has the fiefs of Pelennor, Lebennin, Lamedon, Belfalas, etc), each fief including one or more provinces. There is a lordship title for each province and for each fief, with appropriate benefits. Lords that stay in their fiefs will receive extra benefits.
Let's say, there is a Fief of the Shire (Hobbiton, Westmarch, Buckland, others?).
When Dwarves (or Elves) occupy a Shire province they can build a "protectorship" building.
The protectorship building essentially
-drain some money from the province taxes
-make impossible to build faction military buildings (and "mannishing" the province)
-raise a little the province's order ("we are giving you a self-government, so stay put!")
If the Dwarves take all the Shire they got the Fief of the Shire.
Then all the Shire "protectoriship" building can produce some low-level troops (alike the Cult reform).
I don't really know much of modding, thus maybe the concept isn't applicable.
I can add some more:
-The leader of the Shire got the Fiefdom of Shire as background, even if he don't own all the Shire, maybe locked on him per script (is possible?). This way you need to destroy the faction before earning the title.
Same for Elves and Dwarves (there is only 1 faction each?).
If Elves are 2 o 3 factions there is a possibility of "Elves killing Elves", so maybe the "Fiefdom of the Galadhrim", "Fiefdom of Mirkwood" and "Fiefdom of the Gray Havens" can be useful. If there is only 1 faction of Elves, than "Fiefdom of the Eldar Lands".
And Dwarves got the "Fiefdom of Erebor".
As a sidenote the Dwarves concept can be expanded. They always dreamed of revive their lost kingdoms... so, what if they can "clean" the Gray Mountains, Blue Mountains and Moria?
(I'm not saying they become right away proper "homeland", but with time and a gargantuan population investiment (not easy for Dwarves) )
-The "protectorship" building can be upgraded, improving the province order and the troop raised. For example, at an Elf level 1 protectorship you got Elf Hunters (no armor, knives and short bows), at level 2 no more Elf Hunters and Elf Militia (armor and sword) and Elf Archer Militia (armor and bows), at level 3 something even better (BUT definitely not good like a proper Elf troop).
The protectorship is, of course, more expensive than scrapping the local population, and is only a "civilized" way of dealing with other races (meaning the AI will be not prone to make protectorships).
-Maybe the production of local troop can be enabled (per script or whatever) only if all the provinces of the fiefdom are "protectorship"-ped
just my 2 cents