Lo-Fi Games

Just as players can create towns and such of their own how about letting the A.I also do that

The game randomly generates the towns at the start right, and there is about 10 towns to start with.
Over time Popular shops or traders that make lots of money might start there own towns or little trader stations. It could be set to have a Minimum limit of 5 towns so that if a player or AI destroy a town the wealthiest trader or citizen creates one. A maximum limit of say 20 so that it doesnt get to cluttered and when near the max limit large armies of rival factions might spwn (or better armies from enemy faction towns begin to march towards yours).

I dont think the workings of this should be made complicated only that when you have few towns more are made and when you have many towns some are taken away.

There have been discussions of this sort, the AI factions creating outposts for mining, growing crops, and that sort of thing. Both hired laborers and enslaved people potentially working for different factions in these outposts. There are quite a few other features that are slated to be implemented before anything of this nature gets included in the game, but ideally these sorts of outposts will have strong effects on the dynamic economy when we get one. This way you could dress a squad up in Sand Ninja uniforms and go raid and destroy one factions ore mining outfit, only to set up shop and sell the ore you process and steel you smelt to a faction that now has limited access to those materials.

It remains to be seen what Chris' plans are for a dynamic economy, but I could see the AI being capable of laying out some prefab outposts and constructing them if this is the route he chooses. It would certainly provide a lot of opportunities for slave-rescue randomly generated missions if there were a multitude of small outposts utilizing slave labor for some factions. And another random mission could be generated at some town centers where they want you to pillage and destroy the outposts of their enemies or competition for trade.