The problem is that expansion give you -1% for each planet while buildings give you flat bonuses to moral. One fix could be to have approval buildings give +5% morale per level and a flat bonus from its main effect. That way you can more easily counteract the negative percentage from the expansion modifier.

I never expand to that many planets unless I can support a very high approval rating on my planets since that is directly counter productive to their development. I almost always make sure my colonies have as close to 100 morale as possible.

I do hope they fix the expansion mechanic... it makes no sense for it to increase linear in a percentage increment. It means that the first few planets have little impact but as you add more planet it will have a worse impact... it really should be the other way around.

-1 morale points would be even worse... -100 morale... nah

But you could make it -0.1, or even -0.02 (or something like that).

It should be a logarithmic function or something - maybe the first planet you make causes some disrest for the Earth Independence Party, but when you have 100, an extra one or two should barely make a difference.

The current appoval system isn't helped by the fact that there is something wonky going on with Approval Relics.  I haven't reached 100 planets in my brand new Beta 6 game, but when I was on 5.3, my approval started to tank once I hit 100 planets, even though I had more than enough Relics to cover my size penalty.  Yes, I already sent in a ticket on it.

Beyond that though, I do think the empire size penalty should be somewhat dependant on map size.  Or rather, number of planets that can be colonized (sorta like how the tech rate is dependant on that currently).  

One good thing is that there ARE several new sources of percentage based approval in B6.  One of the political parties gives 20%.  One of the benevolent traits has been changed so that all starbases give a pecentage based boost within its ApE (it's a level 5 trait so it's gonna be a while for folks to get it unless it is beelined to).  A couple of the other techs that were unlocked also are percentage based.

Still, even with all of that and a fully working approval relic system, it might not be enough.  I am somewhat doubtful that I can get 1500% bonus to approval on all planets even with huge amounts of cheesing.

I think the morale penalty is ment to act as a throttle versus growing empires in order to prolong the game (ie. make it more difficult for a strong AI to swallow a weak AI) but if this leads to the situation that all or some AI cannot develop their colony rush (25 to 30 planets is nothing on an all abundant big-size map) then the penalty creates more harm than good....

^That's the crucial factor, yes.

I'm starting to get the hang of approval on an insane map, at least in early game. Of course, what I'm doing shouldn't be the way it works. I max the Benevolent ideology approval perks. I get the malevolent Intimidation Center (+50% to approval.) I also get the Benevolent Missionary Center and the Pragmatic "defense pyramid" (sorry, forgot the name). I place the Intimidation Center on any tile that modifies approval, then place the other two improvements next to it for the adjacency bonus. Because you can get these ideology structures early in the game, it's an easy way to keep approval under control.  At turn 175 with 99 worlds, my global approval is 83%. Only my new colonies that have not built an Intimidation Center are dragging my approval down. Now, will this still work when I have 200 worlds or 300? 400?  No idea. Haven't been able to play through a game long enough before a new patch is released and I have to start over.

And, yes, Morale Relics are not working right. Still.

Looking into this further, it turns out to be partially a bug, partially a balancing issue. In fact the penalty should not be a multiplier at all. (Morale is often problematic because it is a Flat, that is displayed as a %.)

I have changed it to be a Flat -0.15, this means that if you have 40 planets, you will receive a flat -6. This can easily be countered by building 1 entertainment center.  Not including other global approval bonus from techs and traits.  I might have to take another balance pass at this if it proves too forgiving, but it feels pretty good in my testing.   

We may still have this be a map size setting in the future. Hope this addresses your concerns.

I like that GalCiv doesn't (or didn't) punish you hard for expanding. That's the point of the game! Please temper large empire penalties.