It seems the author got it right. Even though the journals mentioned that they were trying to make a game that did not require so much town-spamming like in Civ, and where you wouldn't be so penalized if you explored with your hero at the start, in gameplay terms it's much better the settle immediately and start spamming out settlers ASAP. The first game I played, I only had 4 cities spread out around the map and that really clunked my economy. Since there doesn't seem to be an overhead with building more cities like in Civ4, there's no reason not to build the, It's free resources. The only limit is the distance you need to have between then (5 squares) which practically makes it optimal to build cities within 5 squares of each other, with the exception of resource grabbing.
Or am I missing something?
Disclaimer: I don't mind this either. It just seems to remove an play-style option that I thought would be interesting.