The solution is clear. Let overflow players be bandits. Unaligned posters who can still report. But their armies can be destroyed by factions, giving very big diplomatic buffs to anyone who manages to do so. But if a faction aligns with them, then the electors take a very negative attitude to the faction, because of the friends they keep.
(Ex: Bandit 1 reports in Bokel. If he takes it, he gets supplies and gold, with which he can increase his reporting strength)
(Ex: Faction 1 hits Bokel. If possible, the Bandit is driven out to a nearby neutral area. If enough force is used, the Bandit could be destroyed. The people of Bokel would love Faction 1, and Ar Ulric would look favorably upon them.)
(Ex: Faction 1 makes a deal with Bandit 1, and Bandit 1 hands over Bokel. Ar Ulric is displeased at their cowardice, and the people of Bokel are very unhappy)
Anyways, I think it'd be cool. Bandits. Beastmen. Orcs. They are all very real threats, and don't go away just because an election is happening. And of course, if a few bandit players got together and decided to really take over a town, it'd make very interesting diplomacy as player factions either deal with them because of their relative strength, or deal with each other to destroy them.
((Naturally I see bandit armies as being a 1 shot deal. If you are gone, you are gone. No respawning.
))
