I've heard the devs mention on how they want to develop rivers and oceans into a integrated part of gameplay. Here is how I would do it:
Geographically) Bodies of water become impassable to everything except ships and messengers (messengers carry a small lifeboat on their second horse ;). Caravans, diplomats, and armies can not cross water.
Port Towns) Any town built 1 square away from a body of water is classified as a port town, and has the ability to build a dock, a bridge, and a shipyard. The dock and shipyard is actually portrayed visually on the map on a water square touching the city. All ships when not on missions will rest in the dock/shipyard and will be mathematically figure in the defense of your city.
Docks) allow the trading ships to reach your town, and is a prerequisite for Shipyard
Shipyard) allows the town to build 3 classes of ships:
1)Trading ships work like caravans and can move resources between cities with docks, and can harvest food from the rich food spawn points (fish) in the water. Research tree to upgrade capacity and quantity. They move at around 50 squares per hour.
2) Transport ships move at around 40 squares per hour, and can transport armies to any land connected to the body of water they are in. Research tree to upgrade capacity and quantity of transport ships.
3) War Ships are able to siege a port, raid a port, destroy a bridge, and attack other ships while moving. War ships have similar carrying capacity as transport ships, but move at 15 squares per hour when carrying troops and can only drop off at other docks. Research tree to upgrade offensive powers, speed, and capacity.
Bridges) require X amount of stone per square, and you can build one from your port town across any square of water. Bridges are built high enough that all ships can pass under them. Bridges can be destroyed by catapults or war ships. Bridges are an occupied square, and must have troops manually sent to occupy the bridge. Players who own a bridge can set tolls based on allegiance to them. Example: NAP gets 100 gold, CONFEDERATION gets 0 gold, WAR gets 20,000 gold.
Military Options:
To send troops across a bridge, you first send them to the bridge. Once they arrive, you receive the option to pay the toll, ignore the toll and fight whatever forces are present manning the bridge, or go to a different square of land that you can get to without crossing the water.
Troop movements utilizing war ships or transport ships are done by moving your troops stationed in your port town to the ships, similar to how you move troops from one army to another. You then give your orders to your ships to take the troops and drop them off somewhere. Once dropped off, your army goes into "awaiting orders" mode, and doesn't move until you give them new directive.
Summary:
Movement across bodies of water in Illyriad has become limited, creating geofraphically significant land claims in order to harness the power of the water ways. Port towns on the same body of water can trade between eachother very swiftly, and can wage war against eachother just as swiftly.
Moving troops across rivers requires the use of someone's bridge. Either your own, an ally's, or someone you don't know. Bridge builders can set a toll on the bridge to help support the cost of it, or can use their armada strength to be the only bridge on the river, causing other players to be forced to pay the toll or not cross. Players can always opt to avoid the tax and fight whatever forces are presently occupying the bridge. Bridges will become a central part of the land, and we likely be the subject of many battles.
the oceans surround Illyriad will become huge trading spots, allowing the movement of vast amounts of good in very little time. Piracy will be on the rise with War ships able to intercept some of the goods and take them back to their owner. Piracy may not be tolerated by all players or alliance...
Port towns will have the benefit of having a shipyard, but also the disability of approaching enemy units able to move faster than any other units in the game. Catapults will be able to move at 40 squares per hour, but only able to land on water connected land. Do you take the initiative and build the finest port of your country, or stay away from the dangers of the water and stick to amassing military forces to defend your lands?