The elder races (Dwarfs, Elves, Lizardmen) are currently very boring to play as because game balance is so lopsidedly in their favor. They have overtuned economies and can spam and spread with ease. Spamming is of course especially annoying because their troops are already of better average quality and therefore should NOT be as endlessly spammable as they are currently and they're considered to be low in number, so spreading across the map should likewise be much harder to pull off.
I would like if they were encouraged to go tall rather than wide, so here's my suggestion:
-they get additional bonuses on the settlement chain at T4 and T5 like cost and upkeep reduction on their military
-however, advancing a settlement chain to T4 and T5 becomes increasingly expensive the more you have of them already
-the more T4 and T5 settlements they have in total, the lower the additional bonus they get becomes
-at a certain number of T4-5 level settlements, those shrinking bonuses are accompanied by debuffs, so say having four T4-5 settlements is the maximum you can have before you receive increasing growth and income penalties from spreading too wide and at even higher levels your recruitment is also slowed down
-they should for this reason get the option to downgrade high level settlements (for a fee)
What this aims at is to encourage elder races to only capture and develop choice settlements and be more dependent on cooperating with other factions to get forward.