This has probably been brought up before, but I don't think I've seen a thread dedicated to it, so I'll just post it.
Monsters, champions, adventures and all non-faction NPCs need some help. Just to be clear, the game already has most of this stuff built in to an extent, it just needs some fleshing out to make it more fun.
1. Their AI needs to be improved.
Right now, they act like mindless zombies doing absolutely nothing other than attacking your caravan and settlements on rare occasions. I can see that there is some intelligence there, because they will occasionally team up, but they seem a little brain-dead.
I'd like to see monster NPCs form large armies, and make a bee-line for your settlements or units. They should feel plenty scary and make you think twice about going near one.
I'd also like to see more "champion" monsters. In other words, I'd love to see a special NPC rise up with unique stats and recruit other monsters to join his cause. You would get some kind of pop-up like an event so it would turn into some kind of quest. This already happens to an extent, but the AI doesn't handle it well at all.
There should be champion NPC heroes as well, that go out all on their own and take down local problems. They shouldn't be standing around doing nothing, but actually completing real quests, hunting monsters and causing mischief all on their own. If a hero has done a great deed, it would make more sense to seek out and recruit them if you have the reputation to do so.
2. Spawn Control.
Near the end-game, monster spawning is completely out of control. Every square inch of land is practically covered in them in many games I've played. The rarity of stronger monsters needs to be balanced as well. It's just not really unique to see the land covered in groups of drakes, trolls, etc.
Also, monsters need some sort of mechanic behind their spawning. Right now it feels like these monsters grow on trees, they just pop-out of nowhere with no rhyme or reason. This may be fine for more lowly creatures, but it's not cool for the more dangerous mobs.
They should also have some kind of natural habitat system. I mean that it should be possible to feel like your making progress on eliminating the threat; you shouldn't have monsters popping up the instant you kill one. You could use lairs, simulate them reproducing, or simply give them a finite limit to their quantity so you could potentially exterminate them around your kingdom.
Mainly, spawning monsters need to feel a little more special than they are currently. It would feel cool to discover an island with a monster problem, but actually be able to send adventurers and armies to get rid of them. Later, however, new lairs would pop-up with a new monster problem to deal with.
Monster spawns should also be a toggle option when setting up a game. You should be able to decide whether your world is "terrifying", "dangerous", "peaceful", etc (reminds me of the Dwarf Fortress method of monsters in zones). This would be an awesome way to play a cooperative multiplayer game with a friend. You would have no enemy factions, but a world filled with horrible monsters to kill instead.