Non-combat groups - Every city has a well developed militia/guard to join, but guards need things to do on their off time. Perhaps this is something that needs to be made easy for players to initiate.
Business opportunities - The more player shops there are, the fewer shopping threads a storyteller has to monitor. Also player initiated. And this could ease travel, as well. Goods need moved, after all.
Divine interaction - We play fantasy with gods because we want to play with gods. A character's personality can be formed around worship to a certain god, but it's twenty times more meaningful when a DS notices that a character would be of interest to a certain god. It doesn't have to be a quest, just getting dropped in on by a god for two posts is awesome.
Small plot lines tying into larger ones - Because these provide cohesion in such a large world.
Easier travel - If Mizahar wasn't so cool, we wouldn't all want our character to visit EVERYWHERE. But, since I don't see the world being dumbed down to prevent travel-complaints... Players should probably start initiating this too.
As players, we all want to move around but we don't want Mizahar to be safe. We want the conflict and the danger, right? The way I see it, the more that people in cities (players) need things from other lands (profit motivated, in all likelihood), the more roads get built, the more patrols get sent out on these roads, the more caravans with guards get sent out. Player businesses play into this, as do non-combat groups, as do city militant forces. Not everything has to be done by the founders, your knight can request to go patrol a road (or dirt path, whatever the case may be) with a company. Maybe this knight (or equivalent) eventually gets put in charge of a patrol company that opens up safe travel to nearby villages, and then out beyond the villages. Then maybe this Patrol Leader gets contacted by a business owner to help deliver a shipment to the border of another area. Characters have jobs, but if the player takes the job seriously then some serious development can happen.
Of course, all of this takes time and characters that have been around long enough to accumulate skills and sway within their city.
There are my two cents.