I like peace as well, but peace is impossible without a strong military.

You have to build up your manufacturing capacity and build enough military to stay a little ahead of the AI. You may still have to fight but at least you will win, and it will be fun.

Edit: Rereading your post it appears that you do not want to build a deterrent military. I may be wrong but I doubt this is possible in this game, or in real life.

"I may be wrong but I doubt this is possible in this game, or in real life."

It is, I basically want the be the Switzerland of the galaxy, but it seems you're right and that this game won't allow for that. I'll just build up a deterrent military and waste time researching stuff irrelevant to my preferred style of play. You'd think my complete lack of military in favor of diplomacy and trade would make me more of an asset to others in the galaxy but it apparently just makes me weak and something that needs to be conquered asap.

If this game's diplomacy model were applied to the real world the US would be invading Canada as we speak because it's weak militarily by comparison, and in general... Only they're our largest trade partner and viewed as an asset in real life. Whoever designed the diplomacy model and its criteria needs to take a Polsci or Econ 101 course at their local JC. This is basic stuff.

Playing without a military is basically an invitation to be conquered pretty fast. You can stay neutral in this game,but you'll need a military to keep unwanted guests out.

In the new game i started yesterday,i took my time with building up a decent military,wich lead the Drengin and Krynn to almost declare war upon me. After all,i was easy pickings. As ssoon as i had built up a decent sized fleet,both of them didn't even dare to attack me.

I haven't kept up with Switzerland's politics over the years, but "back in the day" they required every male citizen to do a military stint and every citizen was armed. They are not an example of a country that had no deterrence.

They may have gone the extra mile to avoid war, but they made it clear to everyone that they would not go down easy if war was forced on them.

As you say yourself, obviously you are doing something wrong.

Comparing gameplay to human history is where you start.  Assuming you can ignore game mechanics without consequences because of your philosophical preferences is another obvious mistake.  I know because I share some of those philosophical preferences.  You will need some minimum military.  You work towards finding a minimum. If you have pirates turned off, I suggest you turn them on.  Having enough military to deal with the pirates seems to get me above some threshold of weakness in the AI opinion.  For a while.

Otherwise, you are going to have to find ways to be clever and then share them on this strategy forum instead of just bitching about other people and their posting habits.

Your Switzerland analogy could be done with an very isolated cluster of stars on a large map with tight clusters.  I've seem them on maps and previously thought they would be bad places to start.  You may find it different.   Even if they declare war on you, you are too far away for it to be practical to attack you.  When they release a map editor, you might be able to set something up with distance and black holes. 

However, this particular universe is still an aggressive place.  Beware.  The Drengin use pacifists as condiments and merchants as snacks.

Well, Switzerland did (and still does) have a military.  Back when wars were commonly raging in Europe they had enough of a military, that given the terrain of their country which gave them enormous defensive advantages, attempting to invade them would be somewhat suicidal for any would be aggressors.  Combine the defensive advantages of their terrain with the fact that they simply didn't have much in the way of resources that were all that useful, and those are the primary reasons for them being able to maintain neutrality.  It had nothing to do with their political finesse.

So in other words, even Switzerland had an adequate military to be a deterrent.  You can either follow suit, or live with the consequences.

Costa Rica has no official military power. (They do have police). Maybe this is a better analogy.

If you were a big hungry empire looking for a cool little country to swipe, Costa Rica would be tops on the list.

Seriously?  You think their terrain and military had NOTHING to do with not being invaded?  You don't believe the logistical challenge of invasion was a major deterrent?  Your irritating sarcastic arrogance and complete ignorance go quite well together.

The Swiss do take their defense very seriously, they have mandatory military service, and they have to keep going for 1 month a year untl they are 40. They also get to keep their army rifle at home so they can quickly respond to any invasion!!

Without trying to sound mean, you are incorrect. Geography was a major reason why with Swiss remained neutral. 

 Best Answer:  Very simple. On two of its borders were nations on one side of the war, Italy and France. On the other side of the conflict, and also bordering Switzerland, were Germany and Austro-Hungary. Whichever side Switzerland declared for, it faced potential invasion from two directions. 
It's geography is also why it was not invaded, neutral or not. It's mountainous terrain is a daunting prospect for any would be invaders. Add to the fact that Switzerland has defended their neutrality vigorously, with most of the male population of the country traditionally receiving basic military training, and it wasn't worth invading. The cost in manpower and material to take the country wasn't worth it. Also, other countries found Switzerland's neutrality useful. They could send officials there to unofficially meet with officials from the countries they were fighting, a low key back door way of feeling out the enemy, to see if negotiations would be possible to end the war. It has also served as a haven for spies to slip in and out of enemy countries, before working their way back home. The Swiss have long since learned to take advantage of this to maintain peace, and to make money at the same time. this applies to WW 1, as well as wars before and after.

Switzerland is the worlds best example of how to integrate terrain factors into defending their territory. All bigger bridges that lead over mountain valleys already have enough TNT in them to be blown to pieces, rendering most of land untravelable by cars, lorries or tanks. They carved mountains out in order to install military airports, silos etc there which cannot be bombed by standard enemy airforces. Infantry training revolves more about guerilla tactics so even if major swiss cities are conquered or annihilated they still would be in control of most parts of their land.