These regions are either regions national to you or are claimable regions. In both cases this is determined by checking if one of the ethnicities of the region is the same as the main ethnicity of your capital region, and under which proportion (more for national status, less for claimable status). Another possibility is population loyalty toward your nation. At 50% loyalty, the region is part of your National soil, and you automatically get a just cause of war (Casus Belli) should anyone be occupying such a region. Population loyalty can be changed over time with events and some decisions though, so it is theoretically possible to have a region switch to another status. This alone prevents countries from expanding endlessly, as there is no other means but a peace treaty to gain legal ownership over a region.
Perhaps you may think it is too constrained toward history. Again, there are options to play sandbox, but for players wanting to try PON as it has been designed, rest assured there is still a huge room for expansion, as the hundreds of colonial regions await your rule, should you embark in this direction!
Peace treaties are handled with a concept that is now quite proved in strategy games (sometimes reinventing the wheel is superfluous

The game also penalizes harsh treaties. The victor in the war can decide how harsh he wants to be. Should you try to get the most possible out of the defeated, then you can be sure that the relationship between them and you will stay abysmal. On the other hand, if you go for a ‘gentle peace’, spending only a fraction of your Warscore, then you’ll see that relationship improves much faster afterward.
As for warscore, it is possible to gain some by various means. Defeating the enemy in battle and capturing regions give you some ‘instant’ points. But that’s not all. Holding the capital region or some of the objective regions of your opponent (see article #1) will also give you points each turn. So, if you manage to hold these objectives, you can almost wait for the enemy to come to you, because if not he will be the loser in a few months (or years, depending on his resistance). There are also other, more subtle mechanisms about WS, that can force your opponent to literally ‘beg for peace’, because being backstabbed by the home front is a possibility in Pride of Nations! [/INDENT]