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Civ/Civilization IV/Modding/Tutorials/Minimum City Range
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The default minimum city range, or minimum city distance, is 2 squares between cities. Some mods change this to 3 squares to lessen overlap between cities. This distance can be changed by editing the file GlobalDefines.xml in the directory Sid Meier's Civilization 4\Assets\XML. (Search for " MIN_CITY_RANGE ".) To make this change in a mod rather than your main files (which should always be backed up), edit GlobalDefinesAlt.xml in the directory Mods/[Mod name]/Assets/XML/.