Problem:
At the moment (Beta 3A) when you capture a city you also capture the whole area, so e.g. capturing an empire town as kingdom the whole area turns green within the instant and all resources are controlled by you. The same thing happens when someone founds a city at the outskirts of your territory: Boom a lot of land is instanly lost.
This is quite bad with the new sytem of resource control.
It is also not visualy pleasing.
Furthermore it removes the defensive advantage (-25% on the offender) of kingdom vs. empire wars, because troops that were on your (dead or fertile) ground are instanly switched to a disadvantage when a nearby city is conquered. Therfore this mechanic strongly boosts conquering players, who gain the "defensive" advantage as soon as they capture a city.
Solution:
Give some kind of kingdom allegiance to each city. This value increases and pushes your borders slowly out, while the borders of the former inhabitant are slowly reduced. The city tiles themselves should change to the terrain of the cities conquerer the earliest after several turns, so that the former possesor has an chance to gain it back (remember attacking on tiles of different allegiance gives a 25% disadvantage). [I first thought you have to store territory on each tile but that is not needed].
By this way razing conquered citys will become inetresting, as this intantly removes the influence of the city (which is stored in the city obj).
Below an example how the influence of a city might look after a conquest:

For an isolated town this might look a bit strange but assume there are neigboring towns which add to the red border.
So the fertile (or dead land) would really creep out slowly (like the goo from the zerg in starcraft I) and the territoral as well as offensive advantages would also grow over a couple (maybe 20 to 30 turns) to the size of the former enemy city.