I suspect that "activating the world" is going to be a project that will take at least a year and a half, possibly more. It may be one release, but it's more likely to be three or four (with the usual spat of post-release bugfix versions).
What this really means, I think, is that this is going to combine the functions of Army and Caravan Arc, and work on them as a single unit. I expect that within a year or so, Toady is going to expand the "sites can now really change hands" to extend to "sites can change into YOUR hands". It'll be especially interesting to watch non-military ways of doing so. Rather than killing elves, for example, you could capture them and coerce them into organizing a pro-dwarf revolt inside their forest cities, allowing you to get the spoils of capturing the site without having to send out an army (which you could also do). Negotiations with diplomats would have to be expanded, i.e. if you kept losing dwarves to sieges, you might be able to get peace at the price of 25 steel bars a year. If you had the king in the fortress, this would be further expanded as you'd be running a civilization, so for example rather than 25 steel bars a year you might be able to annex a few small settlements from the other side- so it would be much like Civ diplomacy.
This is likely to extend into a rehashing of how entities interact with each other. More specifically (and now we're starting to leave an educated prediction as to the feature creep in the immediate future and into the territory of speculation), each civilization will comprise a hierarchy of sites, since most civilizations seem to operate on some form of feudalism. It seems likely that the hierarchies will be loose frameworks more than strict guidelines- i.e., for Dwarves, the hierarchy in descending order is Mountainhome-Duchy-County-Barony-Settlement, but it will be allowed for a county to have no vassals or for a barony to skip the duchy/county steps and answer directly to the king. It will remain to be seen per each civilization and each species how much intracivilization conflict will be allowed. Dwarves seem to me to be a Lawful Good species (remember that it's us, the cheerfully sadistic and genocidal players, that make them engage in atrocities, not them), and as a result of this it seems to me that wars and squabbles within the civilization will be fairly rare and perpetuated more by oppression than by ambition (ie a dwarven baron might try and declare himself independent from the count above him because the count is being a dick and demanding more taxes and military might than the baron could provide, but probably not because the baron is power-hungry). Goblins, on the other hand, strike me as being more Chaotic Evil, and are likely to be involved in all sorts of bickering within their civilization.