Have you considered leaving cities as puppets for a while?

Unfortunately, you will have take the cities with your military rather than taking them in a trade for peace. However, if a Civ is giving you a dozen cities for peace, chances are you have them beat and taking the cities will not be a problem. And for your trouble you get:

• Puppet cities do not cause nearly as bad of unhappiness as an annexed city.
• Since you have to take the cities with units, you'll get the cities a lot slower, and spread out the impact on your happiness. Thus more time to react.
• If you really want to control each city, you can annex them later. However, you can spread out the effect even more by annexing them one at a time, building a courthouse, then annexing the next AFTER the first is happy and useful.

Concerning the empire becoming too large, you have to adapt yourself to the situation. Here's an example from a game I played:

In 220 BC I had 27 towns. I was playing on a huge continent, with 18 empires, on the longest time rate.

My continent was huge, the biggest of all three and I'd attacked and conquered all 5 civilizations that were on my continent. I had 5-6 cities on my own, with 21 puppets. You can't know how large this is without seeing it. As I'd captured lots of workers, I built lots of roads: when you have 20 workers and your Roman legion building roads, this is fast and your cities become much easier to defend. Since I knew I was now alone now on this devastated continent, I didn't need much defense. I could just work on my town.

It's worth mentioning that the game's happiness balance is a bit wonky, which is probably the cause of your "insane lack of happiness". Puppet cities don't produce much unhappiness: it's the people in your other cities that are the cause. For example, in my case, I had lots of gold tiles and all the possible luxury resources besides three(whale, pearls and ivory). I had 5 cotton tiles and 3 silver tiles, but they don't contribute any happiness after the first tile. It would be nice if they at least provided something.

With all six of my cities, I bought or made a Colosseum and a circus if I was able to.

Actually, I'm now at 1720 AD in the timeline and the only thing I did so far is work on happiness. I'm at 40+ town's (I made a new one to cover all land space) but the basic problem is that as soon as I got few happiness points, the town grew up another tier and I went back to negative. All my research and social branches are concentrating on happiness.

When I got the +20% happiness bonus, I had a huge jump from -3 to +12. Then when I made the Forbidden Palace, I went to +30 or so. This is when I started to annex all my puppets. Now that these cities are no longer puppets, they are mine and I'm producing buildings all across the continent. This is hard to keep up: one turn my income is +60 gold, the next it's -20 (this is an exaggeration, but you get the idea), but overall this is worth it. This is especially true during a Golden Age, where I go to +350 gold per turn.

Also, as a result of having all the maritime neutral allies, my food bonus is awesome, meaning my town grew up pretty fast. I see the other empire's best town has nine people; for me, nine is the average of all my towns, including my latest.

My army is still composed of legions and cavalry. I haven't ever needed to create a new one since the last two empires are far away and I only need to kill barbarians moving around. As for tech, I'm about to discover Tanks! In the year 1750, I'll be producing tanks, and I don't think their little gunmen will be of any match.

So overall, it depends on your surroundings. Can you balance lots of towns over short periods of time? If so, you're going to be pretty powerful. I'm about to reach 1500 points. I don't know how good that is, but if I look at the best computer with his 25 towns, he doesn't even have half of this.

Though already answered, I am going to throw in my own two cents because managing happiness is one of the biggest challenges in Civ. V.

Step 1) Realize that unhappiness is inevitable. Cities will grow until unhappiness stunts their growth. Therefore, always be on the look out for ways to increase happiness.

Step 2) Luxuries are a major source of Happiness, especially during the early to mid-game. Be sure to mine, quarry, or build a plantation on every luxury within your empire's borders, and choose new city locations based on their proximity to new luxuries.

Step 3) Explore and meet your neighbors. Each individual type of luxury only gives your civilization the same +5 happiness, i.e. having 2 sources of silk does not give anymore Happiness than just having 1 source. However, if your neighbors have excess luxuries of their own, you can swap different luxuries giving each nation an extra +5 happiness. Word of warning, if the luxury listed has a one in the parentheses like this "(1)", then it is the nation's last bit of that particular luxury. AI civs will be very loathe to part with it and their price will go up.

Also, I have never seen the AI iniate an offer to exchange luxuries. The player needs to routinely check the diplomacy menu to see if any nation's have excess luxuries you might trade. Sometimes, you can pay several hundred gold in lieu of offerring a luxury of your own.

Step 4) Save your pennies to bribe City-States. Bribing city states have a lot of benefits, including extra food and culture. Now, if that city state is an ally, then also share their strategic resources and luxuries with you. So, browse the Diplomacy menu to see which City-States have luxuries you do not. This is a great way to pick up extra happiness.

Step 5) Build Coliseums, Circuses, and Theaters. These buildings take a long time to build, but are ultimately one of the few ways to garnish happiness on a widespread level. I mention these buildings for their economy, they give the best amount of happiness for the gpt maintenance.

Step 6) Control expansion. If your Happiness is already at 2 or 3, there is no room for another city until Happiness goes up (an exception might be made for a city that adds a new luxury to your empire). This also means do not acquire enemy cities when your happiness is already low. Since there is a Happiness ceiling on expansion, a player should only acquire enemy cities that are worth keeping in the long run. Otherwise, they should just be razed without ceremony. If necessary, a settler can always be dispatched to reclaim the location under more advantageous circumstances.

Step 7) Annex cities 1 at a time, and immediately build a court house. Puppet cities can be annoying with their tendency to build Barracks and Arsenals when they cannot build military units. Yet, an Annexed city will provide more than double than unhappiness as a normal city (at least 6 unhappiness plus population*1.2). Keep in mind that is on top of unhappiness it creates as a normal city. There are a lot of benefits to annexation, the process just needs to be planned out so as to not stifle the nation.

I did not discuss any nation specific buildings or strategies, but there are out there. India in particular gets a significant reduction to unhappiness caused by population.

This happens to me in every game I have played, simply because I tend to take a lot of cities by conquest.

A few ideas that didn't get a lot of attention in the other answers:

1) Play as Egypt. For large civilizations, the Burial Tomb is a great way to add happiness early. There is no maintenance cost, so you are gaining 2 happiness per city for a very small cost. It replaces a building that would otherwise give no happiness, so this feels close to free.

2) When you get behind on happiness don't be afraid to raze cities. In older versions of Civ I almost never did this because I risked the AI sending a quick settler in, and it also had diplomatic ramifications. At first, I played Civ 5 this way, but I realized quickly that it was too easy for happiness to get out of hand. Now, every time I gain a city by conquest I install a puppet government and leave it in place until the city attempts to build something I don't like. If my happiness threatens to drop below -8 I start razing my least productive cities. I know that I can always send settlers back to those locations, and doing so will save me some unhappiness as well as the 5 gold per turn from maintenance on a courthouse. Avoiding the -50% production that comes from happiness less than -10 must be done at all costs. Trying to build your way out of the penalty is extremely difficult and really puts you in a hole. Razing cities is still a last resort for me, but it isn't an automatic decision like it was in Civ IV.

3) Start building happiness buildings before making war. I will typically raise and army and start building happiness buildings immediately afterward. I know that the incoming cities will cause large amounts of unhappiness so I try to generate a large positive happiness bubble before I take the cities. I've found that being over +20 before the war helps neutralize the problem before it starts.

I agree with most of what has been said here, and I'll add this:

Unhappiness will drop by one per turn per city and will last for as long as the number of citizens in that city. This means that a 2 citizen city will be back on track faster than a 12 citizen city.

I often raze cities that are not in ideal locations and that are not producing enough gold. I keep as a puppet a city in a good location with lots of gold and other luxury tiles around. Once I even offered a city to a neighbor to keep him peaceful towards me; this payed off pretty well and reduced my unhappiness greatly.

Once I get into war and get many cities (from a peace treaty or by conquest), I make sure that they don't grow fast by removing food tiles and replacing them with trading posts. By doing this, I make more money faster for buying a coliseum or other happiness-related buildings in the cities I own -- 60 for accepting 10 cities for a peace treaty is the usual, should be close to 0 after 10 turns.

I always keep a captured city as a puppet; there's no need to annex them, even if you think it would be better to choose what to build there. It's better to raze it and send a new settler there (saving 5 gold/turn for not having the courthouse/city is a must for me).

I also change the lumber mill to a trade post, reducing the speed at which they get built. Having the extra gold also let you build the high-maintenance cost theater in your own city once you get to that technology.

Another reason to keep them as a puppet is to keep the quality of culture low enough to get the next policies, and they will usually build the monument and temple fast enough to give the extra push to get nice policies that give happiness.

I played over 15 games in the last five weeks, mostly on a huge map, and did a few conquest victories with minimal city annexation. The only good reason to annex a city is when you get on another continent and you want to pop out some new war unit or settler from it!

Having 6-12 cities on my own and having all the rest as puppets is sufficient; you don't need any more than that to win the game easily.

I also won the game once by building the space shuttle by around 1950-2000 A.D. on a huge map with 10 cities of my own on difficulty level 4. There was no wars at all and I rarely had unhappiness, no less than -5 for a few turns. I kept a small but strong army just in case; it was easy to have advanced units as I focused on science.

Go to the town you don't need to grow and toggle "avoid growth"... no growth, no unhappiness. There is no point in having all your cities go over like 10 citizens.

I agree with most of what's been said with a few caveats:

1. Avoid Growth is a coarse way of managing citizen growth. A more precise adjustment can be reached by manually assigning citizens to minimize food while maximizing production, gold, culture or science. Manual adjustment should only be temporary until happiness reaches a comfortable point.

2. Annexing a city can be very advantageous if that city has Wonders. Capital cities of large enemy civs should probably always be annexed as these cities tend to have the most Wonders and are the most developed.

3. When entering a Golden Age, set cities' citizen allocation to gold to accumulate large amounts of gold so that later happiness can be increased quickly by buying happiness producing buildings. Also consider setting cities to Wealth Production although this depends on how many production points a city has as Wealth Production generates in gold only 10% of the city's Production points. Almost forgot, also eliminate unneeded roads and units to lower gold per turn expenses.

4. Lastly, plan ahead. If Happiness goes down to around +3 concentrate on increasing happiness and/or controlling unhappiness:

To summarize:

1. Increase Happiness by building/buying happiness producing buildings and Wonders, razing unproductive cities, buying and improving tiles with luxury items you don't have and trading for the same. You should have been developing the Piety Social Policies early in the game. I usually do Honor first then Piety.

2. Control Unhappiness by manually allocating citizens such that food production is zero and no new citizens can be created. Avoid Annexing cities until Happiness recovers to about 10 or so.

Remember the more Happiness the quicker Social Policies become available. It is especially important to have high Happiness until the Piety Theocracy Social Policy has been developed.

Two excellent options to the peace for 12 cities:

Refuse, that civ is finished, your army can slowly roll through through the remaining cities and pile up immense XP. Throw up the courthouses, you won't be hit with the quick -50 unhappiness, and you can slowly manage your conquests towards happiness. Of course, this will require another hour of your life.

Take the deal, then sell a couple of peripheral cities to another empire. Make sure other civs have a lot of gold. Even at high difficulties they'll pay many thousands for a small city, so make sure they have it. They'll actually reject your "what will you give me" because they value it so highly, they think they're getting a deal, you can get 3000-6000 for size 4 cities. So you unload a little unhappiness and the 5000 should buy about 25 points of happiness buildings. Sell 2 cities, and you just bought yourself an entire, perfectly happy, civ, ready to go (and eventually they'll finish their courthouses, and be happier)

You'll have to do all the regular happiness maintenance stuff anyway

I really like to use a social policy that gives +1 happiness per city connected with the capital, that make my hapiness go like +80 even when I conquer other empires, the happiness is always above 50. Anyway I have many cities(like 60) and 90% of them are connected to the capital. I also build in every city: a monument, a library, a circus,a collesseum; and a theatre in most of them.

I've been having a think about this recently as I'm a bit fed up of the unhappiness problems in my games. It seems the trouble is I like building non-overlapping cities with big populations, but this is very hard to scale up to Huge maps.

Happiness comes from:

• Buildings - scalable with number of cities
• Special Policies - scalable with number of cities
• 'Auxiliary' Sources - don't scale; ie. Wonders (like Notre Dame), luxuries and natural wonders.

Buildings

Colosseum (2) + Theatre (3) + Stadium (4) = 9 happiness.

Let's say you get about 1 unhappy per population (I think the actual ratio depends on difficulty level and whether you're Gandhi) and ignore unhappiness from number of cities for now. That means that in the end game you can only have cities of size 9 or less without eating into your 'auxiliary' happiness. That seems very constraining to me as I aim for cities of 20 or more.

Add more buildings to this list by trying to place each city with access to stone (Stone Works gives +1 happy) and horses/ivory (Circus +2) and by picking social policies:

• Honour: Defensive buildings give happiness (up to +4/city total!)
• Piety: Some cultural buildings give happiness (can't combine with Rationalism)
• Rationalism: Some science buildings give happiness (can't combine with Piety)
  etc. (policies change wildly when the game updates in my experience)

Special Policies

These three policies provide a direct happiness bonus for each city:

• Liberty -> Meritocracy (+1/city; -5% unhappiness from citizens) [req. trade route]
• Honour -> Military Caste (+1/city) [req. garrison]
• Order [when opening this policy tree] (+1/city)

Together with the buildings above, this adds up to a maximum of about 18-22 happy per city, but a large part of that is capped by the amount of unhappiness the city causes - so it's not all that beneficial to build new cities to build more of these buildings just to increase happiness!

Note that this theoretical maximum is hard to achieve even towards the end of the game and even then is only roughly half as much population as a city can have worked tiles. I'd therefore recommend that when planning your cities' locations, don't worry about overlap or food shortages too much. Keep an eye on your 'maximal happy city size' as you develop the buildings' requisite techs and gain social policies. At some stages in the game you'll see cities are approaching this target value and it could be worth halting their growth by turning farms into trading posts, selling granaries and diverting the surplus food into building settlers.

Auxiliary Sources

Since these can all be obtained while you have as many or as few cities as you like, they can be regarded as a static reserve of happiness. When you have very few cities, this is the main factor in happiness and you can rely on it without needing the policies and buildings above.

In bigger games, you can't rely on luxuries to keep all your cities happy, even if you have all of them. Still, in this situation the auxiliary sources provide:

• a safety net for sudden drops in happiness (capturing a city; growth spurts)
• a means to have a few cities bigger than the usual limit
• excess happiness to save up towards a Golden Age

I think something that might have caught people out is that in the previous Civ games, wonders and luxuries generally gave a bonus to all cities (ie. the effect scaled with the number of cities), meaning you could plan to have hundreds of huge cities and hardly worry about buildings so long as you had the luxuries and some decent wonders. Now the opposite is true and you need to focus more on buildings and policies, and less on wonders and luxuries as you expand.

Happiness as the fundamental resource in Civ 5

One thing that is very different in Civ 5 from previous Civilization games is that happiness is the fundamental resource. This is a departure from Civ 3 and Civ 4, where the fundamental resource is cities. All three games have had a rate limiter on expansion, Civ 3 having diminishing returns from cities (through corruption and waste) and Civ 4 having city maintenance, which required you to maintain a certain level of average development among your cities in order to build more. In all three games, luxury resources and happiness have been present, but Civ 5 made two substantial departures from the previous games that have caused a radical shift in terms of how the game behaves in the limit:

1. Cities cost happiness. In Civ 3 and 4, only population cost happiness. In Civ 5, population and cities cost happiness.

2. Luxuries count towards the empire, not towards each city. In Civ 3 and 4, each luxury gave 1 happiness to each city. In Civ 5, luxuries give 4 happiness to your empire (5 on the Settler and Chieftain difficulty levels).

In addition, Civ 5 maintained the invariant that happiness produced by buildings only affects the happiness of the population of that city, through the local happiness mechanic. Local happiness produced by a city, which is mainly happiness produced by buildings, is caped at the population of the city. Given each population produces one unhappiness, the effect of this is that buildings just offset the happiness cost of population in that city, and don't add to your global happiness budget.

The Global Happiness Budget

The result of this is that your Global Happiness is a limit on the total number of cities and excess population you can have. "Excess population" is the population in any city that exceeds the Local Happiness production of that city. Happiness here now creates a very real tradeoff between going "wide" (many cities) vs "tall" (highly developed cities) in that having super large cities (at least in terms of population) is eating into the same budget as additional cities. While this is an interesting tradeoff, it also means there is a hard limit on the number of cities you can have on a map, limited by the total sources of Global Happiness you can get. This, combined with the lack of vassals and the change in the way borders spread (which is much slower), is why Civ 5 doesn't have the domination victory present in Civ 3 and Civ 4; controlling 2/3 of the land on the map is quite difficult in Civ 5.

Let's do an example. Numbers from here on out are all for post Brave New World, which substantially cut down on the sources of happiness in the game (presumably to make happiness matter more).

Base Global Happiness by Difficulty Level:

• Settler: 15
• Chieftain: 12
• Warlord: 12
• Prince and harder: 9

Global Happiness per Luxury resource by Difficulty Level:

• Settler: 5
• Chieftain: 5
• Warlord: 4
• Prince and harder: 4

Unhappiness cost per city by world size:

• Duel: 3 Unhappiness
• Tiny: 3 Unhappiness
• Small: 3 Unhappiness
• Standard: 3 Unhappiness
• Large: 2.4 Unhappiness
• Huge: 1.8 Unhappiness

Unhappiness per citizen in any city: 1

Core Local Happiness sources:

• Colosseum (building): +2 Local Happiness.
• Zoo (building): +2 Local Happiness.
• Stadium (building): +2 Local Happiness.
• Circus (building, requires horses or ivory near the city): +2 Local Happiness.
• Stone Works (building, requires stone near the city): +1 Local Happiness

On a standard map, each city produces 3 unhappiness. If you're playing on Prince or harder (difficulty level 4+), you start with 9 global happiness. The basic happiness buildings (Colosseum, Zoo, and Stadium) produce 6 Local Happiness total. If you have 5 luxuries, you have 29 global happiness. This means you could have 9 cities of population up to 6, with two extra people somewhere. Any city with horses or ivory gets +2 population from the Circus, and any city with stone gets +1 population from the Stone Works. Any extra population beyond that eats into your city budget. To get more, you need more Global Happiness, or another way to get Local Happiness per city.

What this means is that, at least initially, sources of Global Happiness are the most important things to acquire to enable you to have a global empire. Any city that you get that gives you access to a new luxury is profitable; it pays for itself on any world size and then gives you at least one global happiness beyond that. Any other city you get (either by founding or by conquering) is going to eat into your budget.

Getting More Global Happiness

Beyond starting Global Happiness and Luxuries, each Natural Wonder you discover gives you 1 Global Happiness. The number available depends on map size:

• Duel: 2
• Tiny: 3
• small: 4
• Standard: 5
• Large: 6
• Huge: 7

You will eventually get all of this by exploring, so you can count on having these long-term.

Some natural wonders all produce Global Happiness if you can get them in your borders and work them. These are:

• Old Faithful: +2 Global Happiness.
• Mt. Kailash: +2 Global Happiness.
• Sri Pada: +2 Global Happiness.
• Fountain of Youth (requires a DLC): +10 Global Happiness (and doesn't require tile to be worked; it just needs to be within your borders).

There are several other one-shot sources of Global Happiness:

• Circus Maximus (national wonder): +5 Global Happiness.
• Notre Dame (world wonder): +10 Global Happiness.
• Eiffel Tower (world wonder): +5 Global Happiness.
• Prora (world wonder, requires Autocracy): +2 Global Happiness, +1 Global Happiness per two social policies you have adopted.
• Protectionism (Commerce social policy): +1 Global Happiness per Luxury Resource.
• Monarchy (Tradition social policy): -1 Unhappiness for every 2 citizens in the capital. [this effectively gives you a global happiness boon equal to half the population of your capital]
• Allying with a City State with Jewelry or Porcelain: these are luxuries you can only get from city states (these may not be available in every game).
• Indonesia has a special ability that produces three extra luxury resources when they settle on another land mass, giving them the ability to get 12 extra Global Happiness (15 with the Protectionism social policy). If you are playing with Indonesia but not as Indonesia, you can trade with them or conquer these cities to get these resources.

Getting Local Happiness

As mentioned earlier, any city can get to 6 Local Happiness, and some can get to 7 or 8. If you can found and reform a religion early, you can get +4 Local Happiness per city from Pagodas and Religious Center. If you're playing a coastal map, the Naval Tradition social policy can give you +3 per coastal city. The Military Caste social policy can give one per city. Beyond that, you need an ideology or a civilization-specific bonus.

One of the big things you need to do to manage happiness in a large empire is manage population against your Local Happiness sources. This means being careful about what improvements your build, what food generating buildings you build, and what focuses you give your cities. While you want your cities to grow fast in the beginning, you don't want too many cities to grow too large until you have ways to generate enough Local Happiness to cover their population, or else you're eating into your Global Happiness budget. One of the hardest parts of the game for this is the trough between the discovery of Fertilizer and entry into the Modern Era. This is because Fertilizer increases the food production of many of your farms, potentially sending your cities on a growth tear, and you need to hit the Modern Era (or build 3 factories) to be able to adopt an ideology, which is one of the biggest sources of local happiness.

Note that the following lists are exclusively per-city local happiness sources (that is to say repeatable sources you can use in each city). There are a couple of other sources of Local Happiness in the game, but they are single-city and thus not included.

Obtainable Local Happiness bonuses:

• Naval Tradition (Exploration social policy): +1 Local Happiness for each Harbor, Seaport, or Lighthouse.
• Military Caste (Honor social policy): +1 Local Happiness for a garrison in a city.
• Capitalism (Freedom ideological tenet): +1 Local Happiness per Mint, Bank and Stock Exchange.
• Urbanization (Freedom ideological tenet): +1 Local Happiness per Water Mill, Hospital and Medical Lab.
• Socialist Realism (Order ideological tenet): +2 Local Happiness from each Monument.
• Young Pioneers (Order ideological tenet): +1 Local Happiness per Workshop, Factory and Solar/Nuclear/Hydro Plant.
• Academy of Sciences (Order ideological tenet): +1 Local Happiness per Observatory, Public School and Research Lab.
• Fortified Borders (Autocracy ideological tenet): +1 Local Happiness per Castle, Arsenal and Military Base.
• Militarism (Autocracy ideological tenet): +2 Local Happiness per Barracks, Armory and Military Academy.
• Police State (Autocracy ideological tenet): +3 Local Happiness from each Courthouse.
• Cathedrals (religious belief + building): +1 Local Happiness.
• Mosques (religious belief + building): +1 Local Happiness.
• Pagodas (religious belief + building): +2 Local Happiness.
• Asceticism (religious belief): Shrines provide +1 Local Happiness in cities with 3 followers.
• Peace Gardens (religious belief): +2 Local Happiness per garden.
• Religious Center (religious belief): Temples provide +2 Local Happiness in cities with 5 followers.
• G-ddess of Love (pantheon belief): +1 Local Happiness in cities with Population of 6+
• Sacred Waters (pantheon belief): +1 Local Happiness in cities on rivers

Note that the maximum Local Happiness bonus per ideology is:

• Freedom: +5 Local Happiness (+1 extra for cities on rivers via Water Mill)
• Order: +5 Local Happiness (up to +3 extra with resources and/or terrain for Factories, Power Plants, and Observatories)
• Autocracy: +9 Local Happiness (+3 extra for conquered cities via Courthouse)

Civilization-specific Local Happiness bonuses:

• Egypt, Burial Tomb special building: +2 Local Happiness.
• Persia, Starap's Court special building: +2 Local Happiness.
• Celts, Ceilidh Hall special building: +3 Local Happiness.

Note that to use any of the religion based abilities, you need to spread the religion to the appropriate cities. While pantheon beliefs spread automatically to your new cities and you could theoretically use a pantheon belief without a religion, this isn't long-term viable as religions from other players will replace it in your cities and there will be no way to get it back. Thus, if using a pantheon belief, make sure to get a religion, which will include the pantheon belief as one of its bonuses.

Conquering Cities

A lot of people talk about annexing vs puppeting cities with regards to happiness, but it turns out it doesn't really matter for happiness long-term.

To understand why, we need to dig into the mechanics. The unhappiness penalty of an annexed city is 2 on standard and smaller maps, 1.6 on large maps, and 1.2 on huge maps. Additionally, annexed cities produce an extra 0.34 per citizen. However, this extra unhappiness penalty completely goes away when you build a courthouse in the city. Meanwhile, a puppeted city behaves the same for unhappiness as a city you own, but you can't choose what it builds or buy units/buildings in it.

While puppeting is better for short term-happiness, annexing is actually much better mid-term, and is equivalent (or slightly better) long-term. While a courthouse costs 4 gold per turn, gold is a bountiful resource compared to happiness. The unhappiness penalty from population in puppeted cities is the real problem, and puppeted cities rarely prioritize happiness buildings. Annexing a city lets you focus it's production and/or outright buy local happiness buildings to negate the unhappiness generated by population. Long-term, this all comes out in the wash, as puppeted cities will eventually build all of the buildings that they can. The only long-term advantage of an annexed city is that it can have the religious happiness boosting buildings purchased in them where puppeted cities cannot (such as pagodas).

The real advantage of puppeted cities is that they don't count for the cost of social policies or national wonders. Additionally, since puppeted cities can always be annexed later, there's very little downside (aside from the attentional cost of remembering to annex them) to puppeting a city during the resistance period to avoid the short-term happiness hit.

The bigger choice when conquering is whether to keep or raze. The thing to think about when conquering is "would I have built a city here?" If the answer is no, burn it to the ground. Note that you can raze a captured city later (provided you annex it first), so the only permanent liens against your happiness are the unrazable cities you conquer, which are primarily capitals and holy cities. Note that razing a city will create short term unhappiness (the same as if you annexed it), but this goes away once the razing is done. Alternatively, read on; if you can fulfill the conditons in the next section, you can keep everything.

Going Unlimited

With enough Local Happiness, you can grow an empire quite tall without touching your Global Happiness budget. The limit on your empire then becomes just your number of cities. The next step, the magical step, comes when you can get per-city sources of Global Happiness, because you can then grow an empire arbitrarily wide.

Playing on Warlord or easier (difficulty levels 1 - 3), this can be done quite easily by hacking Local Happiness. To understand how this works, you need to understand Local Happiness. The key here is that Local Happiness is limited by the population of the city. Normally each citizen generates one unhappiness, so Local Happiness will only offset the happiness of that population. But, if the unhappiness from citizens is (for whatever reason) less than the number of citizens, there is the possibility to create "overflow" local happiness. Overflow local happiness effectively converts Global Happiness: it is added to your happiness pool, from which it can pay for the unhappiness of the city itself, pay for unhappiness from other cities or population in other cities, or add to golden age points. Note that you are limited in overflow happiness per city to the difference between the population of the city and the unhappiness cost of that population.

On the lowest three difficulties of the game (Settler, Chieftain, and Warlord), population and city unhappiness penalties are reduced game-wide:

• Settler: all unhappiness is 40% of it's normal value
• Chieftain: all unhappiness is 60% of it's normal value
• Warlord: all unhappiness is 75% of it's normal value

On Warlord, if you max out Local Happiness in your cities, you can have cities be break-even or profitable on happiness with enough population. For example, a city with 9 population on a standard map (3 unhappiness per city) on Warlord (75% unhappiness cost of cities and population) with 9 local happiness is break-even; a city with 10+ people and maximum Local Happiness is happiness profitable. Note that Warlord and below give you other unfair advantages over the AI, so this isn't a "fair" game. If you want that, you need to play on Prince or harder.

On Prince and harder (difficulty level 4+), it's about getting enough things that produce Global Happiness per city and/or the rare abilities that reduce unhappiness for population. Here's the list:

• Meritocracy (Liberty social policy): +1 Global Happiness for each City you own connected to the Capital and -5% Unhappiness from Citizens in non-occupied Cities. [This does double-duty; if Local Happiness of the city is maxed out in a non-occupied city, you effectively get +0.05 Global happiness per citizen.]
• Aristocracy (Tradition social policy): +1 Global Happiness for every 10 Citizens in a City.
• Universal Suffrage (Freedom ideological tenet): Unhappiness from Specialists is halved. [If local happiness of the city is maxed out, you effectively get +0.5 Global Happiness per specialist.]
• Ceremonial Burial (religion founder bonus): +1 Global Happiness for every 2 Cities following this religion.
• Neuschwanstein (world wonder): +1 Global Happiness per Castle.
• CN Tower (world wonder): +1 Population in every city and +1 Global Happiness per city.
• Forbidden Palace (world wonder, requires Patronage): -10% unhappiness from citizens in non-occupied cities. [If local happiness of the city is maxed out, you effectively get +0.1 Global Happiness per citizen in non-occupied cities.]

Note that several of the above refer to "non-occupied cities". Importantly, cities you have annexed do count as non-occupied once you have built a courthouse. Also, puppeted cities count as non-occupied.

Note again that to use any of the religion based ones, you need to spread the religion to the appropriate cities.

Happiness break-even is easiest when playing on Huge, where the unhappiness penalty per city is only 1.8. For example, with Meritocracy and Aristocracy on a huge map, a city connected to your capital with 10 population and 10 Local Happiness will produce a profit of 0.7 happiness. The same city on a large map (unhappiness per city of 2.4) is still barely profitable, producing 0.1 excess happiness. This combo doesn't work as well on standard and smaller maps (unhappiness per city of 3) because Aristocracy doesn't give fractional happiness, so you need 20 population and 20 Local Happiness to break even on a standard or smaller map.

Meritocracy plus the Forbidden Palace means your cities with maxed out Local Happiness break even at 6 population on a huge map, at 10 population on a large map, and at 14 population on standard and smaller maps.

Meritocracy plus the Neuschwanstein or the CN Tower means your cities with maxed out Local Happiness break even at any population on a huge map, 8 population on a large map, and 20 on standard and smaller maps.

India is a special case. India's ability doubles the unhappiness from number of cities but halves the happiness from population. This means that India has the native ability to be happiness profitable (with sufficient local happiness). On a huge map on Prince or harder, a city with 8 citizens and 8 Local Happiness is happiness profitable (generating 0.4 excess happiness). You need 10 citizens and Local Happiness per city on a large map or 12 citizens and Local Happiness per city on a standard or smaller map to break even. This can be combined with any of the sources above.

Note: there are also two pantheon beliefs that can generate per-city Global Happiness, but these aren't long-term sustainable as they get overridden by any religion in the city.