If Estalia and Tilea were added to the game, realistically how could they designed so they're unique and not just "Empire but worse"?

I love what Warhammer did with the fantasy-ified versions of irl empires and cultures like HRE with the Empire, France/Bretonnia, Russia/Kislev, China/Cathay etc. I'm also interested in Spanish colonial and conquistador history so I'd love to see a Warhammer version of Spain in the game, and go around with fantasy conquistadors, with a fully fleshed-out Estalia, and also Tilea for good measure

I've played both Red's Estalia Mod and Cataph's Southern Realms mods, and while clearly a lot of effort went into the mods, they both just feel like "Empire but with slightly better steel, and considerably worse gunpowder, faith, and magic". In particular, New World Colonies in Red's Estalia Mod are incredibly unfun to play because of how neutered they are.

It makes sense that their gunpowder and magic can't rival the Empire's, but they need some other unique element to account for that. All of the factions in game look and feel very diverse, and so should Estalia and Tilea to justify their inclusion. I guess this is both a gameplay question, and a lore/faction identity question.

Estalia could have a mechanic similar to Cathay's harmony system, where units are buffed based on proximity to units of different types. It would essentially encourage you to make defensive tercio-style formations with infantry, pikes, and gunners - Red's Estalia Mod tried and failed to do this. One Estalian faction could be an expedition/colony in a far away land (Khuresh would be perfect for this since Lustria is crowded), like Wulfhart's campaign except not terrible.

Red's Estalia Mod also had Bull Knights, which were a tiny step in the right direction for "fantasy-ifying" Spain, but also the absolute lowest hanging fruit you could pick. GW and CA clearly relied way too hard on the bear motif for Kislev (in everything from lore to visual design) and the faction is clearly otherwise underdeveloped.

This isn't enough in my opinion to properly develop the races. Nearly other race in the game has lots of things going on for them, both culturally/lore wise and in their units. The Empire has the state troops, gunpowder and artillery, war machines, magic, and the Cult of Sigmar all represented in their roster. Dwarves have traditionalist infantry units, highly refined gunpowder and artillery, the Slayer cult, and engineers and their contraptions.

Estalia could have the tercio units (pikes, shielded swordsmen, gunners) as their "state troops" equivalent. Maybe an "expeditionary force" or conquistador set of units, Inquisition set of units and heroes, and Cult of Myrmidia units and heroes.

Edit: Regarding Dogs of War

I firmly believe that Estalia and Tilea should be separate from Dogs of War. Estalia's connection to DOW in the lore is vaguely implied at best, and is mostly assumed by fans who conflate Estalia/Spain with Tilea/Italy. No DOW units are Estalian.

The lore is also inconsistent with the way it conflates Tilea and DOW. Yes, most of the DOW generals are leaders of Tilean city-states. They are described as "mercenary captains", yet are never described as having worked abroad as mercenaries - instead, they frequently hire mercenaries themselves, and use them in battles for personal gain.

So inherently the lore and tabletop separate Tilea from DOW, even if they don't admit it. On one hand you have leaders of Tilean city-states, who are not mercenaries themselves. They hire a combination of homegrown Tilean troops and foreign mercenaries, and use them to conquer parts of Tilea. These leaders need to hire mercenaries, thus they themselves can't be mercenaries and do not fit what DOW is about even if the army books list them as DOW generals.

On the other hand, you have the actual DOW - mercenaries working abroad, using a combination of units from different races and origins. Something like Golgfag's campaign.

Finally, defining Estalia and Tilea as "factions that just use a lot of mercenaries" means that Estalia and Tilea don't have identities and military cultures of their own. It's fine if they hire mercenaries, but they need additional lore and development if they were to become actual factions in game or on the tabletop.