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The AI starts getting bonuses on any difficulty above prince, most of which could be considered cheating. This is to even the playing field and make the AI competitive against humans because they were unable to make the AI smarter which given the complexity of the game is understandable.
The serious gold per turn loss is probably from city resistance as well as the unhapiness and will likely ease once any cities come out of resistance and start producing gold again. It's also from unit maintenance so if you have any units you don't need give them to a city state and if you went autocracy then get the hapiness tenants and the one that reduces unit maintenance and build Prora.
Your cause isn't lost if you can just get your hapiness under control.
As said before, you need to target only the capital cities, as the other ones will often bog your progress down. If there are other enemy cities that cannot be avoided or are pestering you, capture them, but raze them ASAP.
That, and make sure that if you adopted Autocracy, you've built Prora, and adopted Fortified Borders, Police State, Militarism, and Universal Healthcare. If you have lots of CS allies, Protectionism and Cultural Diplomacy can help boost happiness significantly (assuming you've got enough culture and wonders to get them). If it's not too late, make sure that those attempting cultural victory are knocked out first- you'll relieve significant ideological pressure, and snag several wonders that will help your empire. Enact whatever ideology you have as World Ideology- it can turn the tables against a civ whose pressure is bogging you down.
Once that's been done, steal Kremlin from some Order civ and pursue victory for the fatherland.
Raze any extra cities you don't need and work on that ideology pressure since that adds a ton of extra unhappiness and only gets worse as you take cities due to the way the unhapiness modifier for ideology pressure is designed. Not only are you losing hapiness from the extra cities and population you would normally lose but from extra ideology unhapiness with every city capture since it's based on your population or number of cities depending on which is greater. Higher your population the more extra unhappines you get for having an unpopular ideology. If you can't take out the biggest tourism spammer quick then maybe consider switching to the dominant ideology but that should be a very last resort.
If you're not dealing with ideology pressure you can control the entire map by the end and still have positive hapiness.
I think a big problem with this game and newcomers is that they try to learn from the game by watching what the AI does and trying to do similar. Don't do that...ever. The AI can just constantly expand without a care in the world - you can't. The AI can have seemingly infinite amount of units - you can't. The AI does not seem to get any culture or science penalties from having dozens of cities - you most certainly will.
Realize that AI are playing an entirely different set of rules than you. Many of which, again, I don't believe to be known or fully documented anywhere as they aren't in plaintext. But, through experimentation and analysis you can clearly see without a shadow of any doubt that they get bonuses\aids that far surpass what is claimed.
As others have commented, you should only take what's necessary, because the number of cities and your total population counts against you. Since higher difficulties confer happiness benefits to the AI, they may not need to construct happiness buildings in some cases and therefore capturing cities is actually a negative.
But the damage has been done. What you could do in the short term is find whichever civs you're not at war with, preferably a couple that don't like each other as it is (see if they've been fighting each other lately), and gift them the cities you don't like. They tend to accept it. It's not an elegant solution and I frown upon it because nobody acts that way in real life, but in higher difficulties it's a possible tool for if you got yourself in a bad spot.
Not just RTS but any genre, FPS for example the AI is given bonus to accuracy and bullet damage. But the dudes with the guns don't really act any independently smarter then before.
So essential yes, AI's do cheat, to an extent
Choosing your ideology and picking your tenets is very important for the game. Generally, those going for domination with Autocracy should always get Fortified Borders and Universal Healthcare first (you'll be building tons of castles and stuff and you'll have stolen several wonders from your conquests), then go for Militarism, which provides great happiness and synergizes wonders with Professional Army from Honor. Then, go for Mobilization and Elite Forces, and adopt Police State and Third Alternative. Once that's done, pick Clausewitz's Legacy when you feel the time is right for other nations to be blown off the world.