Diplomacy is the art of negotiation used to maintain relations between rival factions for as long as possible. Think of it as a useful tool for holding back the inevitable descent into hostilities. The diplomacy system enables you to construct deals with other factions to facilitate increased trade, military alliances and access through territory, peace treaties, and payments to secure an agreement, and, finally, when all else has failed, formal declarations of war.
Add diplomatic options by clicking on the add offer or demand buttons and selecting one. The proposed deal will take shape on the negotiation table with the strategic overview map displayed so you can see at a glance who and where your rival factions are. In order to construct a proposal select a diplomatic option from the list or click on the X button next to it to remove it. When ready, click on the proposal button. Remember that a complicated proposal involving too many elements may be rejected out of hand as easily as one that doesn't have enough elements to it. It is not possible to initiate diplomacy with a faction that you have not discovered yet.
A trade agreement is a deal between two factions agreeing the type and price of commodities to be traded. The details of such an agreement are not visible to you, you simply set it up and the rest of the negotiation is implied by the other party's acceptance. Trade agreements are hugely profitable for the factions involved. Once an agreement is in place, a trade route is established between the two, with any ports or settlements along it receiving a share of the income. The trade of natural resources influences their global prices by the law of supply and demand. Trade agreements continue until one party breaks the agreement, suffering a penalty to their diplomatic relations. Long-standing trade partners develop a healthy respect for each other, reflected by increased income from trade routes over the life of the agreement.
A military alliance between two factions enables you to call upon an ally to provide assistance when at war, and likewise for them to request your help in the same way. Note that a refusal to provide support when an ally is under attack will instantly cancel the alliance between you.
A defensive alliance is an obligation to support another faction only if it suffers an official declaration of war. If a member is attacked its allies will be asked to join the war against the aggressor. Such an agreement can be upgraded to full military alliance, vassalage or client status.
Satrapies and client states are weaker factions who agree to exchange a large proportion of their income and unlimited military access in return for the protection of their overlord. In addition, satrapies may find themselves dragged into conflicts not of their own design, and unlike regular allies, cannot decline a request to fight for their overlord without automatically declaring war on them. Factions do not usually offer themselves as satrapies or client states, the situation is generally forced upon them as part of a diplomatic deal that is more of a thinly-veiled threat than a fair and balanced offer.
Military access allows armies to pass through and replenish their forces in each other's territory without declaring war or incurring other diplomatic penalties. If you are invited to join a war you will be automatically granted access to your ally's territory for the duration of that war.
The declare war option is used to officially open armed hostilities with another faction, as opposed to simply marching into their territory to stake your claim. Never declare war without first considering the consequences, as an ill-prepared assault could have consequences resulting in your reduction to satrapy or client status, or worse: the annihilation of your faction. Note that when making your declaration the check box asking allies to join you is defaulted to yes. Your allies will assess the situation and may agree to declare war, but might just as easily break off your alliance, leaving you to fend for yourself.
A non-aggression pact is a temporary agreement between two factions not to attack each other for a period of time. It can be broken at any time by either party, but there is a diplomatic relations penalty for doing so. Breaking a pact within ten turns is seen as treachery and will therefore affect the ability to broker of future agreements.
A confederation allows factions to join together for the common good, combining military resources to make all members stronger. Upon formation, your target faction ceases to act independently and their strongest armies and fleets become confederation property. Anyone already at war with the target faction may choose to declare war on every faction within it.
At any time during a conflict, the join war option can be used to request that an ally declares war on a faction you are already fighting against. This means you can look for new allies to help if the war is not necessarily going your way. When they join you in a war, missions can be offered to all your allies, vassals, satrapies, etc. - although there is a chance they may not be accepted. Over time, you may receive similar diplomatic missions from your allies in return.
War co-ordination is not a diplomatic option as such, but you can initiate it from the diplomacy panel. It makes your allies increase their efforts to destroy a designated target. You don't have to talk to a specific faction to designate a war co-ordination target; when you left-click on a settlement it is marked as the target and your allies will automatically send their forces against it.