I think it would be awesome if in combat, when a goblin is low health, he surrendered and there is an option to capture him. In order to capture a goblin you would need to create a jail/dungeon zone. Once a goblin is captured, he is taken to that zone (probably an enclosed jail) and waits for 3 days. It would be dark but funny if you could have them executed. After the 3 days the goblin is a functioning member of society, is able to be named, and used as a laborer or soldier (100% not slavery)
Lemme know what you think