It seems that games on the harder levels require some diplomacy in order to succeed. The AI can ramp up the research and the economics, but it can't strategize the way a human player can. I've played a few games now where I've tried to keep to myself, and it hasn't worked for me. It's only after I decided to play in politics that I'm doing better now. I trade technologies with the less diplomatically advanced races, and I convince the races that can target me to target each other. I'm glad the game is like this, because so many games just blatantly ignore the diplomatic side of things. Or diplomacy and war seem random. The AI in this game actually seems to have a strategy for it's actions. Races will go to war, not because I necessarily prod them to, but because there borders are infringing on each other, or because one is growing too powerful. The AI seems to know who the most powerful race is, and sometimes the others will form an informal alliance to take it down.
One of the best games I've had, I'm playing now as a custom race. The Terrans were the most powerful for awhile, until the Altarians and the Torians declared war on them. I joined in, because they bordered me. Now I've taken a good chunck of the Terran empire, but I know at any moment a couple races are going to decide I'm a threat.
That's the kind of deep gameplay that makes this game addictive.