How does the normal AI get to the Great Mill so fast? (tiny 2-player)

Hmm, and the handy game mechanics FAQ might have the answer right there:

Q: What are outposts good for? Can't I just build another city?  

A: Cities can only be build on tiles with grain, outposts can be built anywhere. Also, you might not want to build a city everywhere. Every extra city splits your faction prestige, which allows cities to grow faster. If you build a lot of cities, they will grow very slow. [Karma to: Heavenfall]

So, have to try that next.  Very counterintuitive, but worth experimenting with....

I'm very curious about htis too, I think the AI must have some kind of cheat going for it, as it always seems to out expand me both in the size of their cities and in the number of them.  If they are doing all this legit, than kudos to Brad for making them so smart.

From your discription, your city is not getting to the correct size quick enough.

Increase your growth rate in your city. Build some buildings that increase growth. You start with one building and another is achieved with the tech civics.

You can also increase your prestige. Prestige also increases growth for your cities empire wide.

Growth per city = Prestige / # of cities.   Do note that with this equation, multiple cities will slow individual city growth as the growth is spread out to each city evenly.

Best way to increase prestige is to level your sovereign. As the sovereign levels, so does prestige also increase. The tech administration also increases prestige by 1. You can also select the path of governor at lvl 4 for some champions. The promotion increases your prestige by 1. With the higher growth rate, your city will get to lvl 3 faster.

About the AI cheating, I do know that their is a bug where the AI sovereigns sometimes start with a few extra paths at the beginning of the game.  That would make them easier to level their sovereign and increase their prestige for city growth. 

I've been able to build the great mill in several games.  My most recent games have been on a medium map and not against all possible opponents, though.  So if there's one faction that always races to build the Great Mill (like the Torians always seem to race for wonders in GC2), then it's possible I haven't had that faction in my games.

Who is beating you to the Mill?  Is it always the same faction?

On large maps I got great mill in my last too campaigns, at challenging & hard.  No cities except what I capured though, and focused on growing my capitol.  Consider this an endorsement to replies #1 & #3.

I'm playing against Relias in each game.  Thanks for the tips, I will focus everything on my capital city and see what happens, and spam outposts everywhere. 

Is there any downside to spamming outposts for every darn resource in the game?  And I'm learning that once you have world-map spells, you always want to spam an outpost right before tackling an ugly mob, so you can nuke them massively before you engage....

Personally the Ai also got the great mill before me (on hard) which I find odd since I was the most bad ass faction in the game all game long, it would have taken my 2nd best city something like 60 turns to build it so I decided not to. 30 turns later or something the AI had it, not impossible (well 10 enemies) but kind of unlikely imo... still kicking their asses though

In what turn did the AI build this?