Clear lairs near your border, and drop outposts after razing enemy cities.

everything set on hard, AI reached 500 score and start "all in" attacks against my towns, just dropping everything it have on single town, capture it and instantly raze.

Mob clearing not viable, since mobs frendly to AI, there are TONS of stacks accumulated over long time, i just cant wipe them due movement limit, some mobs grow above 1000 collective HP and can kill unit or two (especially 15th level dark vizard that can oneshot kill entire army if archers missed or feedback resisted.

You'd have to ignore lairs for ages to get that kind of accumulation, and if they have over 1000hp then they are feasting on AI units and leveling like crazy, far from ignoring them. I haven't seen a non boss monster army with more than 400 hp on a hard world, even after an eclipse, I don't let them sit for that long though. My area is cleared 100% of monsters fairly quickly then I move into neighboring AI territory for more exp, clearing caravan routes and basically making everything on my half of the map extinct, long before major wars break out. Honestly though I'm just drooling a little bit at the thought of so many exp, er, strong monsters running around the way you describe.

Honestly sounds like your biggest issue is you are only using one army, and the one combat per turn limit is hurting you, which is the entire point of that change. You aren't supposed to have just one stack of doom that deals with everything by itself, AI armies should be easy enough for secondary or tertiary armies to deal with while your sov stack sweeps through monster country.

This is not a good idea at all imo. There are already natural softcaps to all three. Putting hardcaps on would only cripple the AI to be able to compete.

Actually GFireflyE I agree with the original post. We should cap towns at 1000 and outposts to 4000 and the amount of armies to 10000. We want to make sure the computer still has memory to run efficiently.

A hard cap will not alleviate your problem. Good strategies will though and on Hard difficulty one may need to find a better strategy.

Also, a hard cap of say 30, and you have 30 cities... when you take the AI city, what happens to that other city... instantly razed or do you get to choose which city must you destroy before going on? Or are you speaking of a hard cap to all total cities on the map, thus you play hard the hard cap of cities is 30... by the time you make your 4 city, the AI now has 26 cities and you are left without the ability to build another city even though the land was there last turn. Outposts run into the same problem. Armies on the other hand. I can't forsee us limiting the number of armies on the map in such a way. What if I finish a quest with a full stack and as a reward I get a unit... sorry but you have reached the army cap and so you must now sacrifice an army to the computer code... It bothered me that there were hardcaps in general on any game. Darn memory problems, I want my maps to be 9 million times the area size of earth, where each square represents 1 square mile...

This is OPTION.

If you enjoy grinding just dont touch it.

Doing something easy 100 times does not make it hard, i just quit that game, becouse 5 absolutely same battles each turn with same units NOT FUN.

in case of limit:

1) Allow to speedup game by limiting amount of objects AI operate.

2) Allow to play without mindless grinding later on. 

3) Force player to think twice before building town at random location, since it wont have chance to build other one in better location.