@xxXEddieXxx Neutrality is not a "nothing's happening" relationship. That is the Neutral player (always at war with everyone) or a player assigned to Does Nothing AI.
Neutrality can be used to depict a situation like two unfriendly countries fighting against a common enemy. For example, if you would want to depict America, Britain and Russia fighting against Germany (assuming there are only these 4 players for simplicity) but with the rule that America/Britain and Russia cannot send units in each other's land territories (which is almost historically correct), you would set Allied for America and Britain, Neutrality for America and Russia and for Britain and Russia and War for everyone else.
In this case, Neutrality is practically "Almost Allied" or Allied with restrictions. (For example, their fleets will be able to defend together just like if Allied.)