I have this enabled so that for every 4 territories, you get an extra army, but it doesn't seem to be doing anything? Is it only for if you have 4 territories in a bonus you don't completely own? If so it should say that in the settings, so people don't think they're making their games like an actual risk game.

you need to have enough territories to to get more armies then the base-amount of armies you already receive

(so with a standard/base income of 5, and (1 army/4 territories) you wont get any extra armies for the first 23 territories, you ll get 6 armies when you have 24)

Ah, ok I see, so if I wanted to make it like a real Risk game, I would set minimum armies to 1 or 2, then set it so you get extras every 3 territories?

Ah never mind, I misinterpreted that, I would set the minimum to 0, as the territory bonus has to be giving more than the minimum bonus, right?

correct,
though usually you set a minumum of armies above zero so you can conquer stuff a bit faster the first few turns, and to make it harder to completely eliminate a player.

Hmm, ya I realized that, I was kinda balancing it out by just making your starting territory a little stacked lol, but that doesn't matter when someones pushed you back to a single territory, and your not getting reinforcements haha.
Although I guess it would work if I'm doing a game based on Risk rules, as the whole boards going be filled anyways.

Actually.. Risk is base 3 because you never get less then 3, with the extra armies set at 3 territs

http://www.hasbro.com/common/instruct/risk.pdf

↑ Official Risk Rules.. Page 6 shows relevant information

"Territories. At the beginning of every turn (including your first), count the number of territories you currently occupy, then dicide the total by three (ignore any fraction). The answer is the number of armies you receive. Place the new armies on any territory you already occupy.

Example: 11 territories = 3 armies
14 territories = 4 armies
17 territories = 5 armies

You will always receive at least 3 armies on a turn, even if you occupy fewer than 9 territories."

Also see here: http://warlight.net/Forum/Thread.aspx?ThreadID=1390