the way I was thinking of it would be you could focus as much on either side of it as posable, you'd even be able to play the game without ever getting into a war (diplomatic efforts, ecconomic ties, ect). it would start out more as a sim city, were you need to take care of resources and basic city infastructure, of mutable cities, but there would be a lot more intercity focus than any simcity has had before, so there would be two main modes for the simulation, city mode and nation mode. in city mode it would initaly play out a lot like any sim city, and initaly you'd only have the one city, but once you get a big enough city ('big enough' is something the player decides) you can try to found another city else ware on a nation map, and claim larger territory, or build up a military force and outright conquer another city, this would require a city builder AI, which might prove difficult (unless we supplied some prebuilt cities or made it MMO). all the while you buld police forces and other public services, military assets, your education levels in your cities have an impact on how easy it is to get certan things, like an education level of 100 it becomes posable for you to get nuclear technology, but it is prohibitively expensive (and posably less reliable) unless you get your education levels up to 160 or so. logistics would play a huge role, you'd need to plan out rail lines and highways to ensure you keep your industry alive and troops supplied IF you are in a war, also unlike any simcity game it will take time to build things, if you lay out a highway it wouldn't just POOF into exsistance, youd get an estimate on how much it would cost and how long, if you find you desperately need some money later you can suspend/cancel construction and save whatever you haven't spent yet.
oh, another good idea, if you fail management of a city bad enough they will revolt, and all military assets they have will be used against you. you'd have the option of recognizing them as a new state (losing power without haveing to fight, posably opening new economic/political ties with a state you are no longer responsible for) or fighting them back into submission.
in terms of combat, you'd be able to deploy what ever assets you have in what ever cities they are in, but the distances they are from were you want them will play a role in when they get there, if it takes too long for one of your forces to arrive the enemy will realize you are plotting against them and attack, or maybe even someone you were not planning on fighting will think you were about to attack and do a preemptive strike (especially if you call for forces too far away and they stray too close to another nation's border, this is another case of how logistic management would be important, planing the rout not only to get what you need were you need it, but also not making blandsulvainia freak out cause they see an armada of two hundred foot tall nuclear attack gerbil robots marching towards them)