I don't think vassalage will work, because I don't think most players would willingly choose to allow their realm to be a vassal realm.
The defeated players would have two options: to become a vassal of the conquering realm with chances to regrow in time and be able to challenge it again later or to be destroyed and colonized, like it happens now. The difference is that they would have the possibility of resisting later if they chose the former. While the conquerors could bet on being able to maintain them subjugated if they decide to take the easier route of not destroying and recolonizing everything.
Vassalage works in reality because the ruling nation has a big stick. The vassal gets out of hand, and the master comes over and beats the crap out of them until they knuckle under.
And that is precisely what I want to happen. Right now beatings are quire rare.
This won't be possible in the game. If you intentional put mechanics in to keep realms small, it will be too easy for the vassal to grow in size to rival the ruling realm.
Empires are not made solely by their centers of power. A HRE-like Emperor would also rely on other vassals to keep the most rebellious ones in check. The difference is that he wouldn't have that much power over them to begin with.
And are you seriously worried a realm will not be able to oppress others? When has that ever been a problem?
