Sloan Risk Diplomacy variant - work in progress:
If all territories were SC's, then multiple units stacked per territory needs to be allowed to create flow of movement. Individual units within the same territory would be given seperate orders. Individual units holding in a single territory could both be supported together, as a territory, by a single order from an adjacent unit. Individual units moving together between the same two territories could likewise be supported by a single order from an adjacent unit.
Maybe instead of only one country's units allowed in a territory, multiple countries units can occupy a territory up to the maximum units allowed per territory. Civilization, Avalon Hill boardgame style (a different game than Sid Meir's Civilization computer game) Territories could move against or support against other countries units in the same territory. Maybe each territory could have a unique maximum number of units it was allowed to contain. That could introduce the historical flavour of differences in geography. eg Ukraine could contain 4-5 units while one of the Saharan African regions 1-2 units.
Alternatively, for less SC's than territories in the game: players pick their territories like normal Risk, but without placeing any units, get a number of home SC's, then allocate the home SC's to whichever territory they decided, every player chooses a territory for a home SC one at a time in random player order. Then lay down units one at a time in random player order, either a regulated mix of F's and A's, or players choose what they want. (maybe a unique historical country bonus as well, see below)
For historical flavour players could pick or be randomly assigned a historical country. (more choices could be available than players or even territories in the game; roleplay your favorite foreign government :P) The historical country could come with unique bonuses. eg extra SC; extra F, A or unit of choice; starting Risk card; the right to trade any territory for another at beginning of game or maybe even during the game a certain number of times; getting ownership of the historical country's territory on the board after all territories are chosen, so that some players may get or lose an additional territory (home SC's are not transferable in such a case and would need to be placed elsewhere by the owning player); building an unowned neutral A or F in an unspecified territory at the beginning of the game; the mix of starting units mentined above; etc.
Maybe instead of every territory is a SC, each player is also given a number of neutral SC's to lay on the board one at a time in random player order. A rule that they could not lay down a SC adjacent to their own unit/home SC/original teritory nor adjacent to a neutral SC prevously laid down by that player. (a game in itself) The neutral SC's could be laid down either before or after units were placed, whichever worked better or as optional rules for game variability. The unique bonuses for playing a historical country could include placing an extra neutral SC, removing/moving/ exchanging neutral SC's after they are all placed.
Units gained from Risk cards are placed at the end of the turn the Risk cards are handed in, not the beginning of the turn as in traditional Risk rules. (makes a good house rule when playing regular Risk too). SC reinforcements are during fall turn like regular Diplomacy.
From there, optional advanced rules, Machiavelli Diplomacy style rules, would be available to make an even more complex game.