This is a quote from Annatar11 on how it works in a thread a few pages back. (Search function is your friend ya know...)
"Diplomacy points are gained when a player's total positive relation bonuses with all other players are greater than the penalties. So, say, if in a 4 player game you have a total of 23 positive points and 18 negative, you'll be gaining points. The greater the difference, the faster the rate of gain. So if you get it to 30 positive and 11 negative, you'll gain points faster.
You can hover your mouse over the current point display to see your overall relations status (positive or negative), and the rate of change of diplomacy points."
Thats my good deed for the day, now back to being a gremlin.