I agree with Niverio.
There are many ways to look at this game. Sometimes if you make a 3-way alliance, you and your allies will come in first, second, and third! Other times, however, your ally may get first while you place lower; this can happen because you are deceived by your ally, but it also might happen because you decide to help that ally move up.
Everyone has different goals in this game. One of the most fun parts, and the trickiest, in my opinion, is figuring out those goals and then trying to use them to your advantage. What better subterfuge-type diplomacy is there than when you can convince someone that doing something helps them, when in fact it also (or even perhaps instead) helps you?
But, question by question:
nooneishere wrote:What is the purpose of alliance in this mode?
There are a few main reasons for alliances:
1. To protect yourself.
2. To fight against others.
3. To change the course of the game.
It is important to remember that sometimes alliances can shift, change, or end altogether. Removing or adding people happens - both for you, and against you.
nooneishere wrote:should one honor territorial boundaries?
Sometimes - it is not always and it is definitely not never. The best answer for this is sometimes. Often, it will be in your best interests to honor boundary agreements at the beginning, until you get a better sense of who is who and what you want to do.
nooneishere wrote:Can you be sure that other alliance members will honor it?
Nope, you can't.
Hope this helps.
"No man chooses evil because it is evil; he only mistakes it for happiness, the good he seeks."
-- Mary Wollstonecraft