There is no doubt that winning on diety level on Med Mod 4 is considerably more difficult than with the standard game. Some of the changes in the terrain values tend to create faster growth which accentuates the population advantage that the ai has to begin with.
Furthermore, since the ai initially has more tech (and more pop.) they tend to build more of the initial wonders. Since there are more wonders to be built, particularly those that promote happiness, this gives the ai the extra advantage in a fast growing world.Basically I have only found one way to do well at diety level, a way which tends to exploit the things the ai is not good at (ie battle, navy, slaving). Generally I play with 16 civs on a regular map (or one size larger) with ravaging hordes and settings that provide a fair amount of ocean space with two or three continental masses. Currently I have the disseminate trigger disabled since there is some question concerning it and since the only time I played with it basically it eliminated technology races. ( I think perhaps that is due to the number of civs I'm using)
So far I have found only one way to make up for the
population difference at the beginning of the game and that is through extensive use of slavers. After getting a handful of cities going I usually create a stack of 3-4 units including a single slaver and then begin growing my population by picking up stray ai units and barbs. (Its important not to irritate all your neighbors since at this point in the game they tend to have more numerous and stronger units) This allows for population growth while additional settlers are built. In addition, growing population through slavery allows workers/slaves to be placed on terrain favoring production/gold instead of food. The increased production makes possible the build up of a small army (which also includes a slaver) as well as additional slaving bands while the gold helps keep one in the game in the tech race.
After a fair number of cities are built and a small army ready I typically pick out the most belligerent neighbor and prepare to attack. Sometimes its useful to pick a civ that has built a particular wonder that you like. (By the way at this time I'm typically well in last place on the power graph) Thus begins the conquest which basically has to continue for the entire game. I have never had success trying to outgrow/ outbuild the ai players without major slaving and conquest.
I just began a new game last night and its going fairly typically. After about 130 turns (i.e. somewhere around 1200) I have conquered one neighboring civ and have reached a point in the power graph where I am number eight. I haven't had a status update but I expect that I have nearly as many cities as the leading civs and of course because of the slaving I have the two largest cities (nice because with the big production they can produce defensive units in one turn to occupy newly captured cities). I have three moderate sized armies (6 units). According to diplomacy there are a couple of civs which are strong, maybe seven average and the rest weak or very weak compared to mine. I have an embassy with the number four civ and can see that they have a tech advantage of 5 techs (I didn't get out of monarchy early enough).
The biggest challenge at this point is making up the techs. A few weeks back I played a game where I finally caught up with number one on the power graph in about 1800-2000 (a typical time period to make it to the top) and found that even though I had more pop,cities, gold etc. that they had maybe 20 more techs. It took quite a bit of larceny and battling to make that up and it tends to leave one open to special attacks and small attacks by considerably better units (sometimes dropped from space). The best way to avoid having this happen is of course to go and attack the more powerful civs at an earlier time in the game, thereby providing yourself with new knowledge and in general limiting their ability to develop new stuff. Just don't wait too long because once the ai develops better units, although they aren't too smart at attacking, the better defensive units can make it nearly impossible to take their cities.
I know that this is conventional wisdom, but I hope it is helpful. I would also be interested in whether anyone has succeeded using a strategy that didn't include major conquest, like outgrowing/learning the ai on a giant map.