Since domination of the galaxy is the goal of the game, the mere existence of other factions is against your interest.
No it isn't. Have you forgotten that the game has a diplomatic victory? And that you can benefit from trade with other empires?
If you start wars, no matter for what reason, you are an even bigger threat than everybody else. Because you shown you are willing to take things by force, while the faction who just colonized did not. For a third party, it doesn't matter why you attack - because you don't like their noses, because they stink, because you think if the space map is colored in your color, everything belongs to you ... it doesn't matter. You are the one who attacked. How should other factions know you will stop? How should other factions know you will not claim their planets next? Because you say so?
This is a massive simplification. Context is important. If somebody colonizes a planet in a system I was already in, then yes I will probably dow them and drive them away. But this isn't the same as just launching massive invasions into other empires. There is a difference between defending your own backyard and attacking other peoples backyard.
Also it makes no sense why a complete solar system belongs to you, just because you have a couple of guys on one planet. Let's say there is a solar system with four planets and in turn 10 you colonize one planet. In the next turn - or maybe even in the same, if the AI goes after you - there are still three more planets free. Why should the AI not be able to colonize?
Because it makes no diplomatic sense. Planets aren't individual units, they are smaller units that make up a solar system. Just like how an individual street is merely a part of a bigger city. Because of this, colonizing a planet in a system even though another empire already has a presence in it is a perfect way to create massive tension and distrust between the 2 parties.
To create an analogy, think about how claims work in the Paradox games like EU, where if a another empire owns a province in a region that you own you get a claim on that province giving you a just reason to go to war for it so that you can unite the whole region under your rule.
Well ok, let's say you held on to three of those planets for several turns and just havent got around to colonize the fourth ... well, why should it be considered yours? Colonize it, for your gods sake! What? You don't have the resources to do it? Well tough luck - this is a race of empires for galactic domination. If you can't stand the heat, stay out of the kitchen!
You would be a horrible statesman in real life. You give pretty much no thought at all to how your own actions will affect the decisions later take by others in response. Other empires aren't going to care what you think. If you violate what they consider to be their sphere of influence then they will respond accordingly...
I think humans are the way they are because of our particular evolutionary history. I highly doubt an intelligent species evolved from say... nomadic herd animals, will have the same natural conception of territory and what is "yours" versus "mine" that we do.
Such a species would not be able to get into space. You need an industrial economy in order to build such advanced things as spaceships. A society that rejects the idea of ownership and embraces some kind of socialism, won't be able to industrialize. Just look at the native Indians, their society was extremely unadvanced in terms of economic and technological development. Even the civilizations in North American such as the Aztecs were much more advanced.