In my last game I had a civ (Bismarck) who never grew past 3 settlers, while having room for at least 3 more. I suspect it being caused by building a lot of workers while the AI 'settler time' is, thus denying the valuable resources to expansion, and then just giving up.
Also the AI razing algorythm is simply nuts (though it's not your fault) - once it gets rampant, it razes just about every city.
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