From what I've gathered so far, everything is instanced as said above. However, I might see x players city somewhere on the map and I can go park my army by them t gear up for a siege. That player will be sharing my instance at that time. Also, a different x player could potentially see my army, and may swoop in and attack it before I move in on the person I am gunning for at the moment.
Basically, its like everything is layered over top of each other, and what you see is based upon a grouping of where you stand power wise, location wise, and what not.
If that is the case, my only question starts to be what happens if someone conquers the entire, knowable world? Or perhaps its balanced in a way that makes it nearly impossible to do so.