GA's position is very difficult but it is always possible to find a way out, particularly when Arcaea can't expand much more.
For instance, in the Kindaran war, Aenilia blew its friendships with Kindara and Zonasa, but it didn't bank a whole lot of favor with Arcaea or Cathay because it showed up so close to the end ("American cavalry film", anyone?) and wasn't willing to get its hands dirty. Its position is worse off now than it was before: sure it has an alliance with Cathay, and Galiard has always had a soft spot for Aenilia, but there will be a number of Cathayan nobles who will say, if and when anyone goes to war with Aenilia, that we should wait several months and then speak sternly to the other side and then we'll be even.
The only respect in which Galiard has ever been successful at anything is when the diplomacy game was a big factor, particularly as I am decent but not great at the military game. Aenilia in the old days never had the largest military, but it banked favors everywhere and pushed the MAE while making absolutely certain the MAE never actually annoyed any rulers -- one reason why it spread as quickly as it did several years back. I know Arella hates hearing about Orphen and Luyten but I remember very well how other rulers would line up to get their blessing or Osric of Ethiala's blessing on whatever war they wanted to fight because it was like a stamp of legitimacy.
Cathay was in a situation very similar to Aenilia right when it was re-founded. There was only barely enough support to re-found it at all and we had a very unpleasant choice of either maintaining a half-decent noble count of around 22 or banishing about six people over a couple of months that we knew would be big problems down the road. We chose door number 2 and for a while had 18 nobles - but now we're up to 27. It was stressful right up until I realized that the in-character thing for Galiard to do (and the easier thing for me to do) was to admit that I didn't want to invest the time running a realm that didn't feel like Cathay, and if that meant the realm would fall apart and some other realm would appear and I wouldn't have to do anything other than log in for five minutes here and there, that was fine with me!
