Today I listened to a really great podcast from three moves ahead featuring Brian Reynolds and Soren Johnson - talking about Sid Meier's Alpha Centauri. I consider SMAC and Civ 4 to be two of the very best video games ever created, so it was sort of a thrill to have the two lead designers of those games discussing the mechanical differences and design inspirations for the games.
The best part of SMAC, they both agreed, was the way that all of your strategic choices were contextualized within the game fiction. Interestingly for me, this contextualization was actually a fairly late addition to the game - it started as a very dry numbers-crunching economy & warfare sim. Strategy games are generally economically focused, so it's interesting that the more that fact is obscured the better the games seem to be...
SMAC had 7 really strong "Faction Leaders" who each had a very strong agenda. This agenda naturally pits some leaders against one another:
Gaians - Ecologically focused.
Morgans - Industry focused.
Believers - Faith focused.
University - Science focused.
Spartans - Military & Police focused.
Hive - Industry focused. (Also focused on population increase, but with a pro-slavery flavor)
Peacekeepers - Human Rights focused.
Each leader had certain advantages, represented by game bonuses and penalties. The believers get +25% attack, for example, while the Hive get +10% Industry. These unique attributes naturally led each faction into certain dominant strategies - the Peacekeepers really wanted to get the Council voting regularly, so their double votes could come into play. The Spartans really wanted to find a neighbor to dominate with their military. The University wanted to isolate themselves and research in peace.
On top of all of this, there was the really great "build your government" layer, in which players could select various economic, social, and governmental systems to mix and match. Each faction had a certain appreciation or disdain for each policy - for example Morgan loved "Free Economy" while the Spartans loved "Power" as a diplomatic policy. If you wanted to keep friendly with a particular faction, you needed to adjust your social programs to please them.
Getting to the point...
And now I can finally get to the point of all this - which is that what really made all of these systems so excellent was the fact that each decision you made had several significant decisions which were in competition with one another. For example, if you were near Miriam and needed to appease her, you had to turn down your research systems. That meant you weren't getting much research done - which forced you to actually play the game more the way Miriam played the game. If you ran Free Market to please Morgan, that actually put your society into a different trajectory, which had real consequences down the line for your development.
So your government policy choice was influenced by at least 4 important considerations:
1 - What you wanted to achieve.
2 - What would increase your power in the game (economy, military, political, research)
3 - What would your neighbors think of your choices.
4 - How well you could afford to adopt a different strategy, if necessary.
This last point is especially important - since policy choices were so significant, you were motivated to change them fairly often. It simply wasn't viable to set your economy to Free Market and just leave it there for the entire game. You needed to adapt to a changing situation, and so you needed a Whole Game Strategy which allowed for variation. It wasn't so much a decision about IF you would run a particular social engineering choice as WHEN you would run it. This creates a positive feedback loop with your choices - each choice is difficult, but needs to be re-evaluated frequently.
Many games talk about "decision points" when they talk about a splitting path, or a small handful of options available to a player. These sort of choices often don't really matter to players, because after you make them you can just forget about them. Even games which claim that your choices matter (Deus Ex, Infamous) really just alter a few cutscenes or repackage some abilities to suit the game fiction of choice. These choices are just random decisions to make - you can pretty much flip a coin for all the significance they have.
But SMAC gave you decisions which constantly begged for re-evaluation. The University would call up and say "We've got laser tanks here, and we're not sure if we should drive them towards you or the Spartans. What's your current policy on the freedom of information, hm?" But you're building some expensive unit prototypes, and you need to keep up your current economic policy for a few more turns to get them out at your full discount - so your military, research, diplomatic, and industrial concerns are all at odds with one another.
Failure is a big part of most games, but in many cases failure seems arbitrary. Giving players multi-dimensional choices allows them to create user-stories about why they failed (it doesn't matter if these stories are accurate or not) which gives them a greater sense of involvement & control in the play of their game.