From my observation, when the last monster is killed the "zone of control" of the elemental lord disappears (if you kill the elemental lord, the zone remains until the last monster is killed IIRC).
Zone of control normally matter for recovering land from the cataclysm (it cannot be settled otherwise)... however for some reason elemental lord lands are recovered from the get go, so I can just sneak in settlers and build settlement there... and actually they often get great essence bonuses so its some of the more fruitful cities. There doesn't seem to be any issue with ignoring the elemental lord, killing his underlings, and then settling in his lands... pretty mellow those elemental lords are.
The promise transformation of the lands has never occured AFAIK. It should occur... I say that when the elemental lord is killed his corpse should become a quest spot and when a sov steps on it triggers a little animation (like the one you get on first settlement), transformation of the land on a large sccale, and a small permanent boost to your sov based on the elemental lord in quest
