When u conquer some territory u get -10 penalty to diplomacy factor (territorial expansion) to all nations and -50 to the specific nation u have conquered the territory from. BUT.. If u give, sell, trade ur region to another nation, the penalty of -10 doesnt disappear, so that if u conquer 20 regions, u have -200 to diplomatic relation with the nation u are allied with!!!!! and if u give,sell.. all of ur regions to someone and u have ONLY 1 region, u got STILL -200 penalty to diplomatic negotiations, even if u are a single region faction. Moreover, the penalty of -50 to the nation u took the territory from also doesnt disappear!! if u give back this territory to that nation. So that when u conquer 2 regions from the nation u got -100 penalty plus -200 penalty (20 regions - even if u sell them) u have -300 plus -200 (war penalty) = more than -500 penalty and it is impossible to make a peace with this nation (u took from them 2 regions and gave them back), they refuse 300 000 gold, 15 technologies and 3 regions. Not realistic. Ruining the game.
Here is the picture of diplomatic relations - Hannover 1737 - as soon as I conquer some land I give it to some or appropriate nation, so I got only 4 regions in Europe and 5 in America. Still I have incredibly high territorial penalty:
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