This weekend I finished the improvements to the territory formation algorithm for the upcoming release. Here's a couple of screenshots with the before and after the change:

The new algorithm detects areas that are fully enclosed by a polity/tribe, and adds the cells within to its territory as long as they are depopulated and not under the sea. This takes care of the river cells that often criss cross tribal territories. The small holes you still see on the larger territories are mostly cells that have have populations that are not recognized as part of the tribe that encloses them, thus they maintain their "independence".

While working on this change, I found a weird issue with core distances that I want to take a look at. But after that I will start working on the event/action that will allow tribes to expand into neighboring regions and later to enter into conflict with other tribes.