This just seems like another thing we have "to do" before we can actually do something productive, and possibly fun. I see nothing good or beneficial from this, just another boring, time-consuming virtual-chore.
Yes, the economy would be great in real world, if money come instead of rain. However, their value would quickly be lost that way.
My idea with this was, the bigger the faction the more running costs. However, this is only one of the things. Holding a city in my opinion shouldint either just pop out money. Most of the cities are poor. In previous thread i suggested a TC system which doesint include income. The income from cities would be then made by threatning the traders in towns (or robbing them off).
Anyways, for the more complicated stuff, a fully functional player faction to NPC faction, player faction towards player faction reputation and alliance/enemy system is required.