This would definately make a very exciting game. Lets say there are two towns or so, or maybe some kinda town filled with lepers and demons, whatever. Every two months or so there would be war against the town, the gates would be locked, archer would take place upon the walls.
The fighter who bagged the most people in the game would have the option of being general or taking command of an army or something to defend, and position people. Players should have the option of being soldiers for this general. If invaders get it, they set fire, pillage and rape, loot, blah blah, you get the point.
Players should have the option of joining enemy towns, but if they were to return they would be traitors and publicly hung. Which brings up another topic. A leader would be elected, that would make the laws, hang the people, send people to prison in which case they would be able to make riots in the prison with enough organization.
Which also brings up thieving ( I know theres a forum for this, but bear with me). Thieving should be a LOT harder than it sounds, if you see a thief you can shout THIEF! And NPC gaurds would come out of nowhere, or perhaps gaurds would notice you and throw you in the dungeon. Lockpicking, should be an option, and an underground \'Thieves Guild\' should be formed as well. Players should also have the option of being gaurds, who would also be reserves for the army.
Sorry to rant, I just had to get out all those ideas before I\'d forget \'em.