Stacking works awesome - never really had to use it in vanilla but I sure as heck had to use it in Master's Affliction Mod. Vallu hit the nail on the head on how they work.
In this first playthrough of Master's Affliction, I used them heavily to control wildlands mobs and fight key battles with bandits and darklings. The buffs from stacking outposts helped a ton (similar to the starbase stacking in GalCiv2). https://forums.elementalgame.com/435202
One other thing, your city will only receive the bonus IF the radius reaches the city hub tile, not merely outlying improvement tiles. Thus, if you want/need outposts buffs to stack I recommend (before you have hightower upgrade) to place them at a diagonal 2 squares away from city hub at each corner. You theoretically, if wanting to turtle really hard, have 4 towers buffing the center city tile (this would be epic attack/defense). There is a minimum distance between outposts (I think 3?) so I believe this is the optimal placement to ensure max buffing of your city. Personally the most I've buffed together at once was 3 - but stacking 2 with vanilla buffs is just insane. If you have hightower, you could place them 3 away from center tile.
Also, don't snake a city to an outpost where the outpost is brought into the city walls. Weird things happen...
Alsox2 - if you build them close to a city, remember your ZOC will reabsorb if taken. So for example, if a faction AI walks near your city and takes it, sure they can have it for a round... but the next turn your ZOC will reabsorb it.
Just some tricks I learned playing around with it in Master's Affliction mod (never really needed ouotposts in vanilla except to grab resources, build some stables to help with movement points, or snag some real estate before the AI could get it).
