I would favour this over the alliance bloc system we currently have. Typically, alliances with several realms have lots of drama and and are susceptible to backstabbing, double crosses, falling out, etc... all things that add good things to the game.
If realms are only allowed to grow to a specific it does force other players into smaller realms to help them grow.
Scrapping the alliance bloc and putting a limit on realm size seems like a good idea to me.
