With release wave 2 we now have out-of-the-box hierarchical relationship on the Territory entity. The Parent (Territory) field has been available for a while, but it’s hidden on the form by default.
So if we unhide the Parent field it will become available. Now we can create a Territory hierarchy.
The Sub-territories are shown in a tab on the Parent territory record.
But I’m (still?) missing the View Hierarchy button in the ribbon. According to the feature details: This will allow organizations to model and visualize their sales territories in a hierarchical format.
Wave 2 is not over yet, hope it will wash up soon.
P.S. The Territory entity lacks the standard Status field, therefore I’ve added a Status field myself so I’m able to select only the active territories in the lookup fields by changing their view. This makes it possible to set territories inactive and keep them as archived records instead of deleting them and losing the data.