Sid Meier's Civilization III/Diplomacy

Diplomacy isn't all that powerful against an AI opponent. The real power is in making treaties, war, trading, or demanding tribute.

Treaties
When you start the game you are all alone with no one around you, but as you grow and expand your nation you find neighboring civilizations. These civs can either be your ally or foe. Obviously you can destroy him or her, or you can make peace, which is probably a good choice. Early in the game you can only make peace treaties with warring nations. This itself is not very effective because you can break that treaty at any time that you wish. As you progress in the game you can build Embassies. These embassies allow you to make "advanced" treaties such as Right of Passage (RoP) or Declaration of War. The RoP allows your and your allies units to freely traverse each others' terrain. You don't exactly have to be an ally to make a RoP, actually you can have one with a nation that you don't like