Okee, let's take an example Marshall:
Catland is a five province nation. It consists of West Cat, North Cat, East Cat, South Cat and Capital Cat (WC, NC, EC, SC and CC)
Not surprisingly, CC is my capital.
Scenario 1:
You own CC, but that's it.
UNLESS one of my other provinces is controlled by you, OR said province is one of your cores, then I cannot offer it for peace, and you can't demand it.
On the other hand, I (as the AI) will be more eager to make peace. I can also be forcevassalized if your war score is high enough. Note I cannot be forceannexed, not in this situation.
To forceannex a nation, you must control all its provinces (100% warscore) AND it must be pagan. OR it must be a one province minor and you control said province.
Now...
Scenario 2:
You own CC and SC. Further, WC is a core of yours though I still control it.
You can ask for SC in a deal and I can offer it.
You can ask for WC in a deal, however its 'cost' (in warscore) is doubled since you don't control it.
I (as the AI) can offer WC if I want.
You can force vassalize (FV) me, and probably have a higher score to do so. (I think vassalization costs 70%)
Scenario 3:
You own CC, SC and WC. WC is a core.
You can ask for SC and WC normally. I can offer either or both of them.
Again, I can be FVed.
By owning my capital, if you're a Counter Reform Catholic you can make me change religion if I'm a protestant. By owning my capital (or is it just have high enough warscore? I've never done it) you can demand military access.
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In general, as the player if you don't have 100% warscore, ask for 10% less than what you have a right to. For example if you have a 50% WS, don't ask for more than 40 points in penalties. The AI is more likely to accept this way..it can be quite stubborn if you try to match WS with gains.
The AI is not bound by this and will usually give you the best deals if you can hold out long enough.