Greetings everyone.
To begin with, I did some searching and I know several of my thoughts have been discussed before, but I hope to provide more "why" than "what" by explaining what I love the most in DF and how that could be expanded. I should also mention that I think DF is a wonderful game as is and I am not sure if all my suggestions would be good for it, as they stand on the edge of a dangerous ground. I don't in no way mean to tell Toady how he should develop his game, but I want to offer a view of what makes DF so good a game for me.
I love designing and building systems, and DF is a wonderful playground for that. The most fun I've had in it was building a water network for my fortress, with several well reservoirs, a waterfall, a drowning chamber, mudding of underground forest sites, with good modularity for easy separate expanding and maintenance so that modifying one or building a new system will be risk-free for dwarves and disturb other systems only slightly. All water sections could be separately emptied practically infinite time, as the evaporation chambers were quite big, and there were lot of doors for easy access to pipes and for limiting a possible flooding. This is probably quite basic stuff, but it was very fun to figure out how to do that and actually see the whole thing working perfectly, with zero dwarves getting dangerously wet anywhere in the process.
The point was not to actually make the fortress super-optimal. I don't think my king will appreciate his personal well, because he likes beer. Also as a newbie I picked an easy site and haven't needed to use the drowning chamber even once. That is not the point. The point is learning how to build a system that _could_ be useful in a very wide sense, either currently, possibly in future or in personal dreams. The purpose of most games is to have fun, and I think systems are very fun. I think I am not the only one, which is why I though it might be useful for these thoughts to exist outside my own head.
I was studying thermodynamics the other day and couldn't help to think how awesome it would be to be actually able to build your own engines or even power plants. (I know this is not fantasy-like, and I'll address that later in the post.) It's not that important what is the source of heat (coal, nuclear, something else), but the whole design of the plant (essentially the transfer of the heat and a way to convert heat to power).
Of course if there are many uses for bare generation of heat itself if temperature got a greater part, such as central heating or cooling for the fortress of sub-optimal natural temperature, some plants requiring specific temperature range, food preservation, drink quality (who the hell likes warm beer?), etc. The transfer of heat is probably quite demanding for the CPU, but I think it could be doable with some approximations. The conduction checks interval could be longer, maybe even dependent on the temperature, so the very hot could still burn stuff fast but for small fluctuations or even steady states the temperature can be updated less often.
This is quite closely linked to steam, which is at least slightly fantasy-like. There seems to be many steam-related topics already so I only briefly describe what aspects a steam system in my opinion should have. Transformation to liquid at the specific temperature would be very nice. Some form of pressure is a must as is conduction. Also the basics of thermodynamics such as cooling when expanding and heating when compressed (non-isothermically) would be nice [I'm not sure if the dwarves want to produce liquid nitrogen, but in that case Joule-Kelvin effect would be needed also]. I think the system can be quite simple so that there is no need to model the air in the fortress and outside as a separate gas and play with partial pressures, I'm happy with just gases other than air modeled (although I think vacuum-chambering would be a nice execution method).
Gases and liquids would also benefit greatly from pipes which would make moving them around much easier, but I think this is a recognized enough thing already so I'll not expand the subject.
Electricity would be a way of making power more useful, by allowing the storage of it in an abstract form and the transfer of it more easily and for longer distances. It would also allow some new technologies, such as artificial light.
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In my opinion electricity didn't need to be universally conducting through all the materials, because that would be unavoidably bad for the FPS. We could have some special conducting materials so that it's the decision of a player with a supercomputer to build a fortress out of copper and install a frying switch to a unnecessarily central location, if he so wishes.
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There are also many purely mechanical things that could make life more interesting. Floating platforms would be cool, for example for water-powered lifts, or reversely for pushing water to a higher level. This would require modifications to water pressure system, but I don't think that's an entirely bad thing. If gases are implemented pressure system has to be remade in any case.
Floating platforms could be generalized to any movable constructs and water could be made to apply force to other stuff than itself, too. So in addition to the lift I could build a movable wall, put pressurized water to one side of it and watch the wall move and possibly squish enemies on the other side. With that made it would be cruel not to make some purely mechanical way of moving (pushing and pulling) things around. Build a hook to a movable wall, link the hook with a rope of length x to a windmill, and see the wall being moved.
I'm not sure about firearms. They could be semi-logically be prevented fluff-wise by making gunpowder impossible to make for some reason, but I don't think they would necessarily be a bad thing.
Some form of remote communication might be nice. There are small uses for this, such as a lighthouse dwarf living thousands of tiles away from his family staying in touch, mayor making last-minute import requests to Mountainhome and you getting early warnings about immigrants, ambushes, etc. You could also build measurement devices, which would directly display their measurements in some screen for the player (water levels of different reservoirs, outside temperature, amount of food on stockpiles #7, #39 and #114, etc). The larger uses would require new features and I'm not sure if they would be useful. For example, if the dwarves had artillery, a spotter could report where the enemy is, so that the cannons could shoot to a correct position.
Maybe the "communications" should be more like remote controlling of things. Levers could have some remote device built on them and the general of the military could have in his office a machine with which he could pull any lever with a remote device. Of course the levers could be skipped altogether, linking the original target straightly via a remote device. The point of this would not to reduce walking times, but to make building new systems necessary! The different methods of communication would each have their limits. You can build a cable to a remote location, but it's slow, possibly expensive, cable is easy to sabotage, etc. Or you could build a transmitter and a receiver, but then the antennas have limited ranges and don't work well through stone. Or you could use smoke signals, but boy it is not easy for the programming dwarf to build an algorithm for the receiving computer that understands those.
Now about the level of technology. Judging from the forum posters' obsession to year 1400, I assume it's an official statement for the level of technology. Still, I think there should be no fundamental reason why some of the more advanced technologies couldn't exist.
I don't think it is necessary to stick with some time period. Actually I think it would be wonderful to be able to begin the game in stone-age with more advanced things like windmills and water pumps didn't exist, and then actually devote some smart (new ability! could also affect judging of intent, appraising, etc) dwarves to research, which in time could result in new technologies being discovered. Some of them could maybe also be bought from Mountainhome or even some other friendly civilizations. The existence of fantasy races does not conflict with advanced technology in any way. Allowing advanced technologies would however be very dangerous. DF could possibly not feel like a DF anymore. For a long time I didn't even build windmills or water wheels, because I felt they are not dwarfish. There could also be problems with why isn't real-world technology X in the game even though Y is and IRL X was discovered before Y. Some of these should be easy to avoid by remembering that the technology trees of societies are not guaranteed to progress similarly and dwarves have different priorities than humans, but I understand there would be many potentially unrealistic advancements.
I apologize for the relatively bad structure and repeating of some old subjects in the post. I don't claim these are the most needed things in DF, but as I've been fantasizing about these for a long time, I thought I'd write them down, and post them here.