I tried something similar like you describe, even though it was less realistic and more fantasy style and less politics and more rts: http://www.confrontation-unlimited.net/cuweb/
The world is split into generated islands that connect through portals. That way, as the amount of players rise, the world can dynamically be resized everywhere, not just at the borders. It's browser based and from 2000, but it still works. There are screenshots on the page.

I'm also working on a newer version of it with a dedicated client and nicer graphics etc: http://www.confrontation-unlimited.net This is still in development, so there are some quirks here an there but basically you can build buildings and units and fight.

@Orymus3: Funny that you mentioned the fps mode as I had the same idea and tried that. Since everything is 3d and physically simulated, you can select a unit, press f3 and controll it directly. You can still command your other units around in this mode since you can still select them and give them a target. I'm not sure if this will stay a gimmick though. I can hardly imagine this to be of much use when two armies fight each other.