It's for giving the early Diplotech rush players an advantage over late diplotech players.  That way it ensures the AI will always divy favor points to the former over the latter as long as nobody does anything stupid.

For example, lets say you researched diplomacy 1-5 early game.  The AI in return would note what a silver tongued devil you are.  You then proceed to pimp out the hypnotized AI at your leisure.  But player 2 gets the same diplotechs (neutralizing yours) and already has a bigger lead because he researched civ improvement techs immediately.  Under these circumstances you'd have little incentive to start research under the diplomacy tree.  The diplocapital resource solves this by rewarding the player with an advantage over late comers.

You can use it instead of money to buy stuff from the AI like crystal. It should be used also to effect AI relations, the lower the diplomatic capital the higher the chance the AI declares war. This should also be tied with game turn (the further into the game, the more capital you need & larger the chance any AI declares war), thus this could be one way to make the AIs stronger (by having them "gang up" on the human player).

Anything that can improve the AI would be welcome. 

Generally, I agree, although I don't think the verb "to force" is correct. Force is a subset of diplomacy, so the next 'level' up needs to use a verb like "to persuade," or perhaps something more vague like "to secure."

Language quibbles aside, the general idea of DC seems like a sign the devs are trying to make the game reflect the fact that history depends on more than what faction/nation/sovereign has the most bad-ass weapons at a given moment. What I'd like to see in the future for DC is some input based on player behavior (reputation, karma, whatever you want to call it). The AIs should really be able to look at each other and the human player in terms of their values.

Random events aren't in my thinking on this theme at all; the wording-vagueness point was about Stardock's design vagueness, if anything. What I've always hoped to see is a diplo framework where your faction's view of a given action by another faction would include things like whether your faction valued loyalty over victory.

I still think the simplest way to make DC work is to give it concrete (practical) value for both humans and AIs. Right now it's a gimmick that only has value because the AI is forced to think it has value - and don't get me wrong, I like this gimmick (the idea of it, anyway, if not the implementation); it's already more elaborate than many games' diplomacy systems, but it could be better. I feel like I'm exploiting the AI if I ever trade him DC, because the AI is giving away real practical resources for something that has absolutely no use, the AI just happens to be suffering under the delusion that it's good for something.

So.. why not make it good for something? The thread Mandelik links to had many great ideas for this, just to recap:

-Ability to "buy" champions with DC instead of gold.

-Other neutral units that can only be influenced with DC - i.e. go to a Troll camp or a Dragon nest and buy units with DC. Flavorwise, think of it as using your influence to persuade some of them to join you.

-Unit enhancements that cost DC - say an assassin's kit with a DC cost you can add to custom units. Flavorwise, think of it as using your influence to get special training for your units.

-Abilities that cost DC: say your sovereign can make an inspiring speech to your people, this propaganda loses you influence with other nations (costs DC) but raises your own nation's population growth or somesuch.

-And I'll just add the excellent suggestions in this thread, to be able to persuade other nations to enter trade agreements or peace treaties (or even to marry their children to yours, if dynasties ever get any real purpose) by spending DC.

Suffice to say, there are many ways you could add practical value to DC, and all of a sudden it'd not only have a practical use for that poor AI sap you traded it to for real resources, but even humans would have a use for DC. Can you imagine the AI using diplomacy to manipulate humans for a change? This could happen if DC had a concrete value that even humans could make use of.

If the concept of "spending" DC offends you, you could rework it so that it's not lost when used - a given champion might join anyone with over 200 DC, for example, without the DC being lost. An ability might have a minimum DC requirement but consume no DC when used, just give it a cooldown - and so on.

I'm not picky about the exact mechanics of it, I'm just saying that DC should have some practical use so that humans have a reason to want it other than manipulating the AI, and so that the AI can do something with it when we trade it to him for "real" resources.

By the way, in your own words, you say it's supposed to be a sort of prestige, or charisma - well charisma and prestige both have practical uses to the human that don't rely on AIs being suckers I'm just saying DC should follow that model, it should be good for something, whatever that may be.

In terms of spending DC on actions, perhaps then just assigning DC values to various diplomatic options that are unavailable by any other method. For instance, right now, we have open borders or closed borders. Instead of putting in many more types of treaties for different situations (I only want to pass through for 10 turns or I only want your borders open and not mine), perhaps these sorts of smaller diplomatic actions cost DC.

So for instance, when I try to move a unit through neutral territory without an Open Borders treaty, either I take a relationship hit OR I pay a per-turn-per-unit cost (scaling with the unit power) in DC or something of that nature.

Other things could be the expansion of influence - you could spend DC to grab a square (staking a claim essentially). In fact, perhaps this could be used for the idea of outposts that players want (grabbing resources but not wanting to drop an entire city on it). You spend DC (and a continual DC income) to stake a claim and produce a small bubble of influence.

Maybe for min/max kill-'em-all types, but there's definitely already value for snapping turtlers because a DC advantage can help keep a belligerent neighbor off your back.

As for spending DC, I'm a complexity fan, so I'd like to see it usable for both deals that affirm and increase diplomatic dominance (probably best implemented as a DC-based bonus for trades not involving DC) as well as deals that let you burn a share of your global diplo status so you can gain an asset or agreement (trading away DC rather than using it as 'leverage' and keeping it).

DC as a resource, as it is now, needs balancing.  I totally agree there, but I like the concept of it as "political money".

Sure you can buy "real" resources with it, spend them and make armies and such.  But as your DC goes down and thiers goes up, your diplomatic relation goes down, limiting your diplomatic options, and even causing war.  This is a real consequence of having a DC "gap" with other (AI) realms, so DC has a value for you AND them.

You don't need an uber realistic system in which the game wolrd rotates around a sun, generating realistic day/night cycles, which at the same time shape a realistic Turn cycle to play in, which determines too how long take buildings to get built or kids to become mature (Champions), realistic weather patterns... Neither you need an hyper realistic system in which you have to control the things that your citiizens eat or drink (or the soldiers, or monsters...), the impact of their situation in Maxwell's pyramid, the zodiac sign, microbiologial menaces, complex ecosystems, tectonic plates that move/evolve during the game...*

It's a matter of abstraction. Diplomatic Capital? Diplomatic Capital is influence**. You use your "influence" to INFLUENCE things/events/people to do/obtain what you want. It doesn't matter the interface in which you use that "influence", the same as it doesn't matter how long in human&earth time a turn lasts. The more "influence" you have (obtained by any means and representing whatever), the more the enemies respect/fear you and becomes easier to obtain better deals from them (sometimes giving away some of it). If someone has ever played Yihad/Vampire:TS, he should understand better what Diplomatic Capital [should be/is] about.

We just need more uses for it. And extra ways to obtain it (quest rewards for example).

* yes, I know that some of you are wetting your pants thinking about being able to have all that

** in land, over groups...

It's distinctly different from charisma in how you acquire it, however - where charisma is something your sovereign personally has and can gain more of by levelling, DC is something your kingdom as a whole accumulates based on research and buildings. I think this part of DC is already working well, and nicely distinguishes it from charisma; it's possible to have a charismatic leader of a nation with a bad reputation and little diplomatic influence, and vice versa, as it should be.

But we agree on the part about DC being exploitive money that the AI does nothing with; that needs to change. The problem with DC is not how you gain it but how you use it - and that's where I think it should be more like charisma, in that it should have practical effects tied to the whole "reputation/diplomacy" theme.

That's something like the anti-proof in the pudding when it comes to GC2 diplo mechanics, and apparently Elemental so far. Mostly, your behavior as a human player has little-to-no obvious influence on the AIs' opinions of you. But grinding an opponent nearly into the dust does seem to make them behave like they have a proper grudge against you.