This idea was cooked up in GC with the mention of the Holy Hand Grenade of Antioch and the Ark of the Covenant. Something similar would be awesome for illy alongside the proposed future magic update.
Artifact would be items that are in the possession of an alliance as a whole, and not individual players. They'd sit in the alliance capital and would not be movable (except if the alliance capital changes, then it'd be moved to the next one automatically). These artifacts would bring positive effects for the alliance as a whole, such as offensive, defensive, economical or magical properties. Extra defense from magical onslaught. Extra defense for your troops against Orcs, a boost to basic resource production, extra research production, you name it.
These artifacts would not be permanently keepable by the alliance. Another alliance would be able to claim the artifact for themselves by waging war and sieging the opposing alliance capital. A new option for the end of the siege might be added, so instead of just "Storm and raze" and "Storm and capture" you would ALSO have "Storm and claim artifact(s)", by which i mean you go in, fight out the final fight, take the artifact for yourself and withdraw the siege. Then the artifact would automatically be transferred to your own alliance capital and you'd enjoy the benefits from it (with possibly a weeks time before the effect of the artifact is felt by the alliance at all, given some time to possibly let the mages of the capital "tune in" to the artifact to gain it's energies.
Now these artifact are ancient construct of High powerful magic of all the races and don't work together all that well (especially the very powerful ones). I'd suggest that there be 2 types, MAJOR Artifacts (of which there would only be 20 or so in Illyriad, and of which you can only have ONE in your alliance capital at any one time) and Minor Artifacts (120 total in Illyriad, and you can have maybe 3-5 of them in the capital total)
The total numbers for the 2 types of artifacts COULD be adjusted upwards as the population of illy increases, and with it the Alliance Count.
As an additional benefit, when Alliance Armies are introduced (armies trained and kept by the alliance itself and controlled by the alliance leader and kept via the alliance treasury) the artifacts could be carried at the head of the Grand Army, like the Golden Eagles in front of the Legions of Rome, For Added Morale, or something similar (possibly added magical protection for the army).
Just a small added content to the game, no major added content or game changing material. And maybe added incentive to go to war with someone (you're P-ed off at that alliance, so lets take their artifact as punishment for XXXX offense, show them we mean business and won't be pushed over).