So maybe the boundary of a civs "territory" should extend further beyond their cities the longer worldgen runs?
Use the "legends" ability on a world and select the map. Then look through the ages. You will find that each civilization starts with their "capital" then their area of influence expands (in which they will put new settlements). The problem I have noted, is overlapping areas of influence when the civilizations are at peace. The areas should run into each other, but instead they just keep going till maximum size is reached.
Well, the quantity of trouble you get from the neighbors should be relative to your size and military strength. As was said before, if you just have a small group of dwarves with a wagon and some pets, perhaps with a little dank cave, the nearby power won't care about your existence unless it has a specific reason (religion, at war, civilization is generally aggressive). Of course, once you increase in size, such as after the first immigration wave, the nearby power will take note. Probably by demanding that you pay taxes for living on their land and using their resources. This would probably be handed with the trade depot; where tax-collectors come and demand a certain amount of trade value (likely a percent of your fortress value) and you pay it or they get uphappy and leave, then send a different kind of tax collectors (that might actually take that quantity of value). Of course, I doubt any player is actually going to pay taxes, as there is no benefit. Instead, I am sure everyone will come up with more interesting means to state their refusal.
Also, most kingdoms did keep a close eye on their land, and the response to groups of interlopers was usually swift (sometimes even without reason, just "hey, we own this land even if we only look at it every few years").
(Thank the post warning.) Yeah, but I am guessing that would only happen after you're at war with them. For such a civilization would want more caravans and wealth coming in so they can tax it. So you would probably get "mandates" on certain trade items that add to the taxes you "have" to pay.