One of the brightest new innovations in Civilization III is the advent of cultural ratings as tied to territory and borders. No longer are all cities created equally in terms of territory. New settlements now control a pittance of territory, at least until they build at least one cultural improvement and start to grow.
If you pay attention, the computer AI is generally slow to build cultural improvements. Religious or Scientific civilizations controlled by the computer will build temples or libraries quickly and grow culturally, but races with neither of those abilities often delay building any cultural improvements, and ALL civilizations are slow to build them in their colonies.
Culture offers a way to be passive-aggressive, as a player. Cities with low culture, or especially cities with none, may grow envious of nearby rich cultural civilizations and decide they would like to change allegiance. I cannot tell you how much it surprised me when a city volunteered to join my empire! I was not even trying to be culturally aggressive. It just happened.
This offers one of the most painless ways to expand your empire. You aren't going to see a nations main cities defecting to your side, but their colonies -- particularly ones far from home, plagued by corruption and slow to build improvements -- can be extremely vulnerable to passive takeover. If you have three strong cultural cities near an isolated enemy colony, it's virtually guaranteed that they will eventually switch sides and join you, and this doesn't even anger the mother country!
On the other hand, you yourself have to watch out for enemy cultural aggression. If you have an isolated colony or a major land border with another nation, make sure to build at least a temple as soon as possible, and a library if you can. It's also a good idea in general to be strong culturally at any border, since the stronger cultural city will gain control of any disputed territory.
Rivals will not settle in your lands. That's an act of war! But they may aggressively settle in any nook or cranny that is not within your borders, and this may cause you headaches. The most vital aspect of expansion is building or capturing cities, but you can't neglect the cultural side and expect to get very far. Even if culture is not a priority for you in a particular game, you have to get at least a little, and the sooner the better.
Finally, unless you have disabled the option, you can actually win the game via strong culture, either in a single city (requiring much effort and lots of mines and shield production concentrated there, with which to build wonders), or nationwide. The cultural victory option is actually a gambit, and I have not yet tried it as of this writing, so I'll write more about that later.
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