I’m pretty sure this has been brought up before but I couldn’t find a specific recent suggestion similar to what I’m presenting. If there is, my apologies.
There seems to be a spoken rule that is not part of game mechanics. This is that if you find an open plot within a city, the warden should get this plot back because of the work they’ve put into the city.
My suggestion to solve this is to have a detection algorithm that identifies a ring of plots and disables anyone but the owner / guild of the ring to plot inside of the ring.
In this example, these are all plots owned by Y, x, N, M, K and H. g is inside of the ring of x plots. If g plot expires only x or its guild will be able to claim it.
To prevent grief of small settlements, if H decides to make a ring around x and H is not in the city guild, their plots become like a campfire and expire within a set period of time.
It seems that some of this logic already exists with Settlement naming. Adding this feature will allow small settlements grow over time by expanding their ring.
Example (with emply spots to highlight x ring)