Ok, here's my constructive post:
If this gets implemented, I think nations should be made open for a while. Nations can proclaim if they want to war or not, and towns just switch around to what they want.
I think there will also be a LOT of residents moving around if they don't agree with their current town. Towns that proclaim to not participate might get a sudden influx of people, which might benefit the war towns as well, since they can have more plots for, umm, whatever it is war towns do.
How long will wars last? Will it affect non-warring towns? For example, say you're just visiting a friend's place, and then some random enemies come and finish you off. Will town embassies be protected from wars? If they won't, it could seriously affect embassy plots of people that don't want to war. It could also work the other way around, as war towns might just store valuables on embassy plots.