One way to add interest to the Minor Factions is to give them specializations. Some could be farmers, miners, smithers, farriers, traders, diplomats, mercenaries,... Negogiate per turn trade routes with the farmers and miners. Contract the smithers to make superior armor and weapons (a resource like horse and crystal, allowing you to train N units with their gear). Buy battle trained mounts and specialized gear from the farriers. Barter Materials for Gildar etc with the traders. Pay the diplomats to politic in your favor. Hire wicked cool units from the mercenaries. + more specializations: Healers, Priests, Mages, Engineers, Alchemists, Thieves...
We could also have minor factions offer the occasional quest. Bounties for monster heads and bandit ears. A plea for help to rescue their kindnapped princess from a powerful bandit lord. Payment to erradicate some factions outpost which has been settled to close to their borders. etc. The better your relations, the better quests, and maybe even gifts, that they offer. If you turn down, or fail to complete their quests, your relations suffer. Tweak it such that there is challenge, risk and reward to gaining and maintaining good relations with them.
