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Let's keep it simple :
Religion enter play at fixed point on the Time Scale.
Religious Leader (Jesus, Confucious, Buddha, Rama...) are given to the first Empire to endorse thoses religion.
Religion should proliferate from area to area each turn during the first few turns of their appareance. Proliferation rule to be fixed.
Religions can cohabitate on area, religion can cross sea but not ocean.
If an Empire have more than 1/3 of his area in a religion that is not its adopted religion thoses areas only count has half value for income and glory.
If an Empire have more than half his areas in a religion that is not his adopted religion thoses area goes in disorder.
When an Empire adopt a religion all area in disorder of this religion lose the disorder marker.
An Empire can adopt a religion at start.
An Empire can convert an area to his state religion the same way he can militarily remove disorder, if the area already got another religion put a red colored religion chit on this area else put a normal colored one. This can only be done if the empire control the area at the start of the turn. When the empire lose control of the area remove the red colored chit.
If the Empire is in Jihad/Crusade he can remove religious marker from other religion from his areas (this is done as a conversion but need to use twice as much troups), it earn 1 Glory point by area converted. (NB: the old religion isn't entirely removed but his influence is so much lessened it doesnt show up again at high level).
Extra rules from basic games (need more counter) : A schism can be played on an Empire using the Heresy card. Choose an area that start and draw a card for every adjacent area to see if the new religion grow there. It replace the old version. Thoses area are treated as if not of the state religion anymore. The new religion can be adopted by the state but cannot be targeted by another Heresy card.
Heresy can only be played on Islam (Chiite/Sunnite) and Cross-religion(Catholic/Protestant), as far as I know there is no Schism from Bhuddism not Confucianism.
Jewish religion is not put into play simply because: 1- it is as much a national/political/racial entity than a religion, 2- it doesnt propagate over more than one or 2 areas (enough to be a state religion), 3- it cant be adopted by a state.