If a city can't be attacked at all I think it will be very bad if they are too big. And if they can be attacked, it wont matter if they are too big.
So I think that the protected area (behind walls or something) of a city should be keep't quite small, and the non-protected could be quite big. Just think about an medieval city with walls as defense where the peasants lived outside of safety and that buildings could easy be burned down in an attack. But a smaller number of important buildings was always safe.
If Xsyon had the same system it would balance it self quite good I think. And I would prefer if the area protected only grow with area instead of radius to keep it balanced. Or that the wall cost x (material every week or so in) upkeep per square meter it protect, that way if a tribe want a big city they have to work for it, and it would be equally hard to have a 2x city size with 2x people.
Why an unprotected area with an protected? Because then a tribe/city could loose a LOT but not everything, that mean it will never be wiped out because every member went on a vacation. But I would hate to see cities 100% protected. The resources should be unprotected (or at least less protected).
But it is a balancing act, to easy to attack a city will make small tribes very rare, to hard (or impossible) and we will only have small tribes as there is no need for large ones.
/Khenke
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As always it's just my view on it, yours will differ and rightfully so.