Another idea, this time for colonialism, is to have "colonial levels" like in HoI 4 where you can balance between giving a colonial government more freedom or taking more control.
Giving more freedom to a colonial government can allow them to raise larger armies and have more control over their subjects, while taking more direct control gives you more access to their resources and capital in return for any consequences that rise from not accepting the locals as equal citizens. Perhaps an ability to choose who rules a colony and how as well. If you have a colonial government be run by natives, and/or more democratic, they may demand independence harder, but will offer more military aid during war, and educate their population better. If you have a colonial government run by your accepted culture, and/or less democratic, it is easier to hold in the reigns, but they get access to fewer and lower quality troops, and they educate more slowly (which may be a good thing).
Britain at the start of the game needs to start with a special British East India Company tag as a colonial subject for India (which becomes the British Raj after the Sepoy Rebellion). It gets moderate freedom, to allow for itself to recruit a sizable force of Indians (Britain itself should not be able to recruit non-British troops without having an equal-citizenship law) and most importantly have access to controllable economic laws (not free enough so that Britain CAN influence or dictate those laws). When industrialization kicked in Britain, India became more of a trading colony than a resource one, so giving the Raj enough autonomy to warrant economic laws can allow Britain to practice mercantilism in India like it did historically, and make lods of emone.
The entire world is divided into possible colonial regions for any out-of-continent westernized invader. For example:
-Africa has the historic European-drawn lines for division. Things like South Africa, Rhodesia, Angola, Niger, Sudan, Abyssinia, etc.
-Asia has a region for Raj India, Colonial China (excluding Yunnan, Inner Mongolia, Manchuria, and Xinjiang), separate colonial regions for Manchuria and the likes, Korea, Colonial Japan, Indochina, Persia, Arabia, Mesopotamia, East Indies etc.
-Americas have their EU4 colonial regions if Europe feels like making a comeback
-Europe has colonial regions for Britain (including Ireland, sorry guys), France (including Belgium), Iberia, Italy, Germany (including Netherlands), Scandinavia, regions that vaguely resemble de-jure kingdoms in CKII in Europe, if any Asian, Africa, or American feels inclined in carving up Europe.
Dynamic names for some regions. Obviously the Indian colony is the British Raj, Rhodesia should be a unique name for Central Africa or Zimbabwe or something(?), Mittelafrika if German, Firanja France and Andalusian Spain for any colonizer from Africa, Middle East, or India, etc. get creative.
A Colonial government can only be set up on another continent, and without a contiguous boarder (Russia doesn't get balkanized into a bunch of colonial nations, and neither does the United States). If Japan invades Korea, they don't get a colonial government, they can either satellite or outright conquer. Due to the size of Asia, the Middle East should be considered its own "continent" (from Afghanistan to the Caucuses to Turkey to Egypt) because invading Persia as Japan is hella different from invading China as Japan. Also to note, a colonial governments can ONLY be made with enough territory in the region, like in EU4, and must either be coastal or boarder another colonial region/satellite/puppet/territory you own.
Only Westernized countries can create colonial governments. I'd even argue that only Westernized countries should be able to invade farther away than one sea-zone adjacency, but that may be too much.
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