The upcoming release will feature a semi-functioning government structure. However, the government structure is fairly complex, and so I feel the need to explain how it works (or will work, in some cases - the next release focuses on getting units recruitable, and leaves some elements of the government structure still a work in progess) in the form of a preview.
Broadly, the government structure was inspired by a mixture of those in RTR-VII, RTR 6, and indeed EB. What I ended up coming up with was a structure which broadly fits all factions, and offers different paths to integrating the settlement:
(note that the "i"s will appear as "i" ingame - for some reason, they didn't like me resizing the image)
The names vary as per faction as appropriate, and some specifics vary as well, but the basic structure remains the same.
At the point of conquest, only the most basic (ie first tier) buildings can be built. The settlement will also have high levels of unrest and not generate much in the way of income. At this point, there are two choices: To establish direct control over the settlement, or to establish a client state.
Should you choose subjugation, public order will remain low for the time being, but once you integrate the settlement into your kingdom, public order will rise as the people accept their new masters. From the level "Integration" onwards, you will be able to recruit AoR units, and the settlement will become economically productive. You will also be able to take a direct hand in building more infrastructure in the region.
If on the other hand you establish a Client State, you will have a more stress-free region. With the people in the new Client State having things carrying on largely as they were before, public order won't be a problem. The region will however be only moderately economically productive, as the Client State will keep most of its money for itself, and merely pay a tribute to its master. You will also not be able to take a direct hand in improving its infrastructure, which would be seen as meddling. However, the Client State will lend its men to fight, so you will be able to recruit AoRs.
A Client State does not have to remain a Client State. It is possible to reverse your decision and reoccupy it, though that will of course cause unrest and generally negate the benefits of the Client State. A more peaceful way can also be followed: A longstanding Client State (ie a tier 2 one) will have joined its fate to your state long enough that the people will trust you enough to accept you as rulers, as for instance happened in the case of Pergamon and Rome. The settlement can then come under your direct control; however, this takes a lot longer than subjugating the settlement to your rule from the first.
The path from Integration to creating a new Home Province involves Colonisation. Or should I say the settlement of your people in that region. I am applying this term to a range of different activities, from the true establishment of colonies as for instance by the Greeks, Phoenicians and later the Romans, to the establishment of military settlements by the Macedonian conquerors, to the various migrations of the northern "barbarian" tribes.
This process obviously produces benefits to the region - higher growth, more prosperity, and higher public order. It also allows you to recruit factional troops. The colonisation building tree is culture-specific (as in real culture, not ingame culture - for instance, the Celtic factions have their own tree, whilst the Germans have another, and so on), and is separate to the government structure itself, though it can only be built from the integration stage onwards. It then allows you to upgrade the government of the region and turn it into a Home Province, which will be able to recruit all (or nearly all) faction troops, and will fulfill its economic potential to the max.
This is a lengthy process in FO. Unlike many modders, I don't see the problem with very long build times - this took a long time in history as well. This means that, depending on the speed of your conquests, many of your regions may not be contributing economically as they could, so you not be able to support more troops than your core can. This rather favours small, compact factions - the large Hellenistic empires will have many not fully integrated settlements, and so will not be as powerful as they first appear. I have hopes that this will mean that small factions can stand up to larger ones, discouraging steamrolling.
However, note that the AI's handling of this system isn't great at the moment, and AI factions don't tend to grow much. This is largely due to a few problems in the coding, which I will correct in future, and possible also due to imbalances in finances (I haven't focused hugely on the economy yet, and only about half the buildings are in place).
Also, as a final note, the role of capitals, as in RTR-VII, is crucial. Do not lose your capital, or you may face economic and political collapse. In the case of the Hellenistic kingdoms, you may have multiple capitals, though one will always be your main one (so for instance the Seleucids have their main capital at Antioch, but the loss of Seleucia would also hurt them far more than the loss of a regular settlement). This, of course, can work as both an advantage and a disadvantage - the faction must protect more settlements, but the loss of one will not cause as great a collapse.