So the aim of Dragon Commander is to expand your kingdom (obviously there will be a story behind it) but does this mean to expand it until you take control of the whole of Rivellon? I would imagine that we can forge alliances with other Dragon Knights where we are at peace with them.

Kings did have peace treaties with other countries in real life. So I would expect this to be the same in Dragon Commander. Not only would this make for interesting role play but also for interesting gameplay. For example, if you've got an alliance with Dragon Knight Old Man, surely he would come to your help if Demon Warrior Smith attacks you and engages your troops in battle.

Dragon Knights originally were supposed to be united. Even during Divinity 2, didn't Talana (before she...you know) have a friendship with Amdusias?