@ Markon... so you're saying if you use your commander in the field as a really crappy mage he'll make a few levels. This is true, but the entire time you're leveling your commander he is not reducing unrest. By the time he's leveled enough to be a powerful city defender and governor at the same time... the game should be functionally over.
Actually, what I was saying was, IF it is possible to have a Commander sit in a city and earn XP reliably, as the OP suggested, he could sit there and by the late game, have at least a few traits that boost cities (Obviously, he's a commander sitting in a city), and also have gotten access to a fair variety of magic schools. I'm not saying go use him in the field as a mage (he's a commander, after all), but rather if you're forced to use him (city defense, for example), he would function much better than a 1st level unit.
Also, on the note of the spells not being useful for a city comander... if he is getting access to city enchantments that none of your other units have access to, by leveling his schools of magic, he's earning XP for sitting on his butt, and making your whole EMPIRE better. And if he's also getting strategic unit buff spells that no one else had, hes making your combat units and heroes better too!
In short, making it easy for a Commander to earn XP every turn for sitting in a city has some balance issues. The adventurers guild at least attempts to make it possible, though of course, if you can only have one of them, and you have 2 or three governors, having them all in that city would lead to one very good city.. and a bunch of newer cities sitting on a big pile of unrest and inefficiency. it's a complicated issue, for sure.
Honestly, the suggestion for having a governor be able to reduce a cities unrest from afar is a nice compromise, I think, especially if it takes an essence slot. Thumbs up to Naidrev in post 7!