Okay, so I know the mechanics behind Race Governance; basically the happier the race is, the faster you get race governance XP and the faster you move up the levels. I get that. What perplexes me is the speed at which NPC opponents get to Champion level, build, and then light their beacons.

I've tried damn near everything short of cheating; optimized terrain, focusing on growth and happiness (i.e. temples, hospitals, etc.), conquering and then releasing as vassal different dwellings, etc. but it always seems like the NPC players reach these levels dozens of turns before I do.

So, here's my question: What are the strategies for reaching high levels of Race Governance? And please don't link to the manual which tells you NOTHING about strategy, just the generalized relationship between happiness and race governance.

First, out of pure curiosity I would like to ask on what level do you play. Here, on Lord AI, there isn't much difference between my speed to get to the Champion level and the AI's. But it's possible that on higher difficulty levels AI cheats on it as well on resources. Emperor especially, so maybe that's the case?
Ok, now to clear one misuderstanding - city happiness is not race happiness. Temples/Hospitals or 'proper' terrain is, generally, a good idea, but getting a race to be happy requires quests from independent cities of said race, migrating them into the cities, doing Betreyal Quest for them and making them your vassal. And I understand you mean independents cities when you said 'dwellings' (I know I'm kinda neatpicking here but you know - dwellings belong to 'monsters', not 'civilized' races).
About strategies... althought having high race happiness is important, far more important is having multiple big cities of that race. A few metropolises with at least 'happy' race bonus should give a very nice speed of getting to Propeth level... So one of strategies would be migrating a race to a big city. I did that once, when I wanted to get 3 race governance maxed - I startet migrating them and I manage to do it and still win as Uniffier (they lost some r. happiness, yes, but not enough). Another, rather logical and simple, way would be creating new cities of said race - but this will take more time, because Outpost race governance xp is... very lacking.

I usually play on Lord and yet the AI usually beats me out to the Champion level, then seems to have enough money to immediately construct the beacon, and then enough mana to light it....which totally bones my civ's happiness. I literally just stopped playing a game just now to check the strategy because on AI lord (though, sadly on an archipelago), I had founded three cities (and am doing a 'round robin of financial juggling to build in them) and the frackin' dwarves beat me to Champion level. Dwarves! Grrr.....

I will try for more consistently for multiple cities, but usually its a difficult balancing act to get enough money and troops to settle a new city.

By Dwelling, I mean Mermen, Dragon, Giants, Fairies, and so on. Those are the ones I usually run into. I should up the amount of independent cities, I guess; migrating is an 'evil' act, so I'd probably not be best off choosing at least the Grey Guardians specialty.

I really wish the manual had been clearer on how to govern efficiently.

Well, dwellings give you nothing to Race Governance. Maybe, just maybe - if you treat them poorly they will have lower morale, but it's not so bad. But I'm not 100% sure if Dwellings races really do have any governance morale.

About cities - I usually leave some unguarded or try to build on places with would benefit me immediately, which usually 'pay' for itself. And I also try to settle them that they work as a frontline of defense. And I usually clear the whole area of neutral armies.
About idepedent cities - it's usually the best to get them, and on friedly terms. If you manage to convince them to form alliance they will start growing, althought on unpredictable way (I tend to prioritise population and production, they... rather not), but at least they grow and build. A way to go around Grey Guardian specialty would be migrating a city then releasing it as a vassal. This way you make up for 'evil deed', and also get race happiness.
One more thing - it's the quality of a city you are looking for. Althought getting 5 metropolis would be hard, but Town/City would be good, especially if you focus on one race. You can always add/change/migrate other races to your cities, if you want to get Unifier Victory conditions, althought you will have to juggle again... Oh, and it's possible that AI gets money for beacons, but I must test it - I'm not long enough on Lord AI - as for now they, sometimes, started building it, but it was at the moment when I could do the same, but didn't care.

F'ing genius! Thanks for the help, I appreciate it and will try it out ASAP!

You're welcome. :D GG probably have to work this way - 'balancing' evil deeds with good ones. This or inaction, really...

Race governance comes from

1] Having lots of cities of that race, the bigger the better.
This is an absolute value: more and bigger cities is always better.
A metropolis, for example, will give you 5 points a turn. An outpost just 1.

You get lots of cities by conquering and migrating, or by settling. If you're lucky you can meet and befriend independent cities of the same race, but don't count on getting enough of them that way.

2] Making that race happy.
This is a limited multiplier to the number-of-cities bonus. Once you hit max happiness, more points won't help you.

You make the race happy by doing nice things like quests and peace or vassal treaties with independent cities of that race, as well as releasing their cities as vassals. Your starting race also gets a big happiness bonus.

You lose race happiness by doing mean stuff like casting destructive spells in their cities, or migrating or razing them.

The AI gets a big bonus to race governance at high difficulty levels, but not at Lord.

If you're still not clear on just how the mechanics work, fire up your game and click the shield right above your leader's portrait in the lower left corner. You'll be taken to the diplomacy screen, with a list of the races in your empire on the right and the current governance level you have with them. Hover over any one of the races there and a pop-up window will show how many points you have and how many more you're getting per turn, and from what sources.

Strategy

The corollary of all this is that evil players are very good at getting high race happiness. Migrate everyone to your race of choice, watch the points rack up. Pick one or two other races to be allies and migrate cities to them too, so you can get the necessary Champion racial governance with enough races to build the beacons. Or just max out governance and kill everything with evil Elven archers shooting homing missiles.

Good players actually have a much harder time. But as Bethezer points out: vassals are the name of the game here. Scout rapidly and make friends with everyone for free racial happiness, then buy vassals and release conquered cities after migrating them. This can actually result in much faster expansion early on than direct military assault, if you have enough gold.

Building a lot of settlements, possibly with the expander specialisation, can also be a good strategy. Again, having lots of gold helps.

But more than all that, expansion is key. A player with 10 cities will be getting twice as much racial governance per turn as a player with 5. Even if the player with 5 has good happiness and the one with 10 does not, the latter will still be getting 50% more points. AoW is all about expansion and the racial governance mechanic is no different.

Hope some of that helps!

Looked it up in-game as I wrote that post. That's what the tooltips said. Very straightforward: 1 RG points for outpost, 2 for village, 3 for town, 4 for city, 5 for metropolis.

All added together and then multiplied by up to 1.75 for racial happiness.

Thanks - I probably remembered them wrong. ^.^

I go for Unifier victory when I'm playing as Rogue with the good alignment sphere. This lets me quickly buy up all the independent cities as vassals, which then gives me a huge financial base. I start building outposts and releasing them as vassals for my starting race (probably tigrans) and whichever other race I'm advancing through racial governance with most quickly. The evil version of this would, of course, be to capture cities and migrate everything to your two top races.