This tread is getting a bit toxic. I see some good ideas and valid concerns here. I'm going to try to be constructive since that is kind of the point of playing games in Alpha phases.

In regards to giving governors the option to close or open a city, I think the city merchant/trader should be crucial in that decision. Trading between cities is supposed to be very important and each city won't have all resources nearby. If you close your city you shouldn't be able to buy or sell goods thru your merchant and would have to rely on your citizens traveling the world to collect resources.

As far as who can use crafting stations inside an open city, maybe non citizens could get access thru trading, tithe, tax etc. Governors shouldn't be able to effectively close an open city by setting the tax too high tho.

Lastly, residents outside of the city safe zone should always be citizens no matter who conquers the city. People are going to start building houses before there are governors or cities. if an Uber guild wants all those houses for their closed city they can buy off the residents already living there or go find an empty area. or they can build all their houses inside the city walls.

Those are my ideas right now. might change as the game develops.