It always does, the KH is always prone to get new cities because the other hellenic faction do not keep them happy, also, since i bet you have your citiziens happy, or at least not angry (the AI almost never does), you get the cities.

Expect this a lot of times, even the once hellenic cities of france and sicily may rebel to you

Yes, every time you capture a city with an installed government destroy it, (i don't know about pastoralism, but i imagine i'ts a government type)

~Jirisys (brand new KH campaign!)