Have a look at [this game](http://warlight.net/MultiPlayer.aspx?GameID=1771179
). my understanding is that you get an extra army for every 2 territories you control, however once you take the whole bonus, those territories do not count towards extra armies.
Have a look at Dante's (blue)income. on turns 3/4 he held denmark and 3 territories in norway (he started their as his second pick) should he not have had 8 per turn? or am i just being thick?