I had over 50 countries in my empire long time ago, but you cannot keep that as cost of the government increases exponentially, also you cannot fit them in a single federation. So as it is said before this game discourage players from having large empires. The maximum number of countries is 10, adding 11th will cause rebellion in an entire empire.
At the very beginning of this game there were 2 players who had many hundreds of countries each, they almost separated the world between themselves by taking entire continents, but there were no limitations at all back then.