Diplomacy: Avoid early wars, treaties are good bonuses. Hit back if attacked. Some AI races have different attitudes, so be cautious about colonizing their systems.
The AI tends to get ticked off if you and it claim the same system(s). Relinquishing claims on contested systems (under Empires--> Borders) might make the AI less snippy. (Quikngruvn)
Regarding where the AI will colonize, the AI automatically claims any system it has colonized, as well as every system right next to it. If the AI colonizes a disputed system, then that opens up a host of new disputed systems in your territory, and their expansion is not slowed at all.
There is a penalty associated with responding with a refusal to any offer made by the AI - the other empire increases its anger toward you. There does NOT appear to be any penalty for just not responding at all. Bug?
Systems and Sectors
| Manual (SEIV)