The more I read about this on the beta forums, the less this seems to be anything to do a new GvG system...
More likely, this might be a port of Elvenar's 'guest races', but instead of being forced it'll be an optional element, and one that can be played over and over again to gain even more settlement quest rewards?!
The love-it-or-hate-it part will be if we need to use existing space within our cities, or else if we end up getting a new 'cultural settlement map' to work with.
Most cities are already overflowing as is, and with so many constant events, I highly doubt that many active players will want to demolish a large section of city for what looks to be a 'side-quest' type dealie... (especially if it ends up becoming a choice between being readily able to play in seasonal/special events vs. this new settlement thing)
At the very least, I'm at least lucky enough to be sitting on 56 store building kits just case I ever need them?!