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AI Tribes pick randomly from the available colors, sometimes there just aren't enough to go around.

During world generation AI tribes are placed, those are defined in the XML files. "wg_ai_placement.xml" in BaseMod defines the placement of the masklings. The ai_placement element defines what biomes the tribe will prefer, what territory size they'll prefer, and what javascript functions to use for generation and ai. I'm not sure how well multiple races will work, I haven't had a chance to test that yet.

Yeah. It would be neat if there were larger tribes with lots of settlements, and then there would be larger battles between tribes.

Also, is there a plan to throw in a DF-like option to abandon an empire and then still have it in the world to interact with?

That would be an interesting idea, but it could be tricky for game balance. The world grows over time, so a player starting fresh in an old world would be at quite a disadvantage.

What if your new player empire were able to send nobles bearing gifts to other empires that you'd made before? Politics would be a neat expansion.

Diplomacy will be coming in a few updates, with gifts, war, and trade, and alliances between the different tribes and empires.

Looking forward to it!