Good news everyone!
Olmys gave me permission to use his territories gamerules
http://forums.relicnews.com/showthread.php?t=156906 and AI for warlords. I have a working version and I am seeing how I can customize it to Warlords (I already have the AI capturing and building Warlords ships and have made larger territories suited to the warlords gameplay)
now this presents an interesting problem with the AI so I have to ask a few questions. Basically the AI is incompatible with the standard AI and there is no easy way to switch this in game (though I am looking into it)
Here are the options I am evaluating
a separate big file for the territories mod, you use a different shortcut to play it, will not impact the normal game
eliminate the standard build mode with resourcing in favor of a mode that works with territories (basically resourcing would be opportunistic, but the majority of resources would be through the automatic system) and shipyards would be objectives rather than buildable
reinforcements mode fits quite well with the territories game settings so it will receive a slight change
this also means that AI will be disabled in Multiplayer games (though it will work in skirmish)