Civilizations now establish new villages/cities/castles as they spread. The castles, at least for now, are strictly military installations - though later they'll be wrapped up in world history/legends and will probably be able to eventually turn into large-scale settlements.
After some more tweaking I'm going to start on civ relationships. The 'spread' phase needs to be altered so that civilizations can begin to war with each other and conquer territory (I can't imagine any world in which 20+ civilizations remain completely peaceful for long). The relative militarism/hostility of each tribe should affect the number of troops (and thus success in conquering other civs) available to them.
I'll also want to begin tying in actual historical/legend generation to this process, which will mean getting a little more in-depth - though I'm not sure whether I should wait until after all of the actual coding processes are in before delving into this stuff. Instinct tells me it would be better to start with thematic depth as a key element, which will mean working on the randomization of history almost immediately in order to avoid having to try to decipher very complicated code algorithms later on (when I've forgotten the relevance of half of what I'm doing right now).
Some visual candy:
Despite photobucket's annoying insistence on resizing everything, you should be able to make out the small village, city, and castle icons spread across the map.