This idea is related to many of the ideas about worldgen.
For example
http://www.bay12forums.com/smf/index.php?topic=63054.msg1453010#msg1453010 .
Now the main idea is giving more relationship between cities farms villeges ext. Each piece of land is able to produce a certain amout of food. This is also related to an effective amout of work that is needed to make it produce this food. A mountain can produce a lot of food but takes a lot of work to make it produce this food while a desert isn't going to produce food at all. This will mean that each settlement is producing a certain amout of food. This food is stored and eaten when needed (it's a variable either related to an invidual in a settlement or to a whole settlement). If a caravan arives at such a settlement and the people think they have more food (or any other resource) this is loaded onto the caravan and otherwise they will try to buy it from the caravan (I know caravan ark is already planned). This is one way for the people (probably everyone for himself) to generate money. Another could be plundering towns taxing passing caravans(if they have a bridge). A certain percentage of this wealth is taxed by the settlement and used to increase the services of the town which could include roads, guard, walls and religous buildings.
Of course producing of course the export of other goods would futher increase the value of towns which would benefit from the addition of more tools for which we have multiple topics already. We could make these resources needed aswell for farming and other things.
Now we have 2 things that can determine the attractivesness of a city: city services and food. If people have to little food they will go looking for somewhere else no matter what. If they think they can go somewhere else with better services and not a food shortage they have a chance of doing so.
If we also chance the default civ spawning so that instead of large cities we start with a lot of small farms that will then devolop would give the feel of technological advancement which would be reflexted by traders.