Literally the only demand made by the dominion was they stop going through the wormhole and making incursions into.their sovereign space. The federation has a neutral zone with the romulans that has lasted like 100 years or more by that point, but if there's a wormhole it's somehow their god given right to poke around someone else's territory? Not even to mention the Cardassian/Romulan pre emptive attack on the Founders homeworld. Prior to that they just sent spies and harrased ships in the gamma quadrant. Seems like a more than reasonable cause for war to me.
They were first mentioned in s2 e7 when those violent jerks made some deals so sell quark wine or whatever. Those guys say they control all trade in the gamma quadrant. From what the show leads us to believe, they contr.the whole thing.
I found an interesting quote from Ronald D. Moore. During the run of the show, Star Trek staff were answering fan questions online. One of those questions:
A very telling look into the mind of the showrunner.
So it seems like people at the time did notice the same things as you did, and came to a similar conclusion from the text. However, the text is still ambiguous about where the Dominion borders are. This quote does explicitly state that the wormhole is outside those borders, citing that trade and exploration in th eGamma Quadrant had been happening for a couple of years prior to the war (which is in the text). I think your argument is otherwise sound, and there's definitely blame on the part of the Federation and other Alpha Quadrant powers in terms of taking the situation too lightly. They should have been way more interested in figuring out what the geopolitical landscape on the other side of the border was like before they sent trade missions and colony ships.
That being said, the Dominion responded to incursions with asymmetric hostility, escalating at every opportunity. First contact with the Federation was a Vorta spy pretending to be a refugee of the Dominion, trying to get information out of Sisko. The Jem'Hadar captured Sisko, and the Federation sent ships to go look for him, ending in the Jem'Hadar suiciding one of their ships into a Federation ship that was trying to flee. Only incidentally do we hear that the New Bajor colony had already been destroyed, and its population massacred.
I'm inclined to @HarryLime@hexbear.net's interpretation, especially the part about the Dominion not having an intention to leave them alone. Definitely the result of bad or no diplomacy all around, but I think it's a bit generous to think that the Dominion wouldn't have been hostile from the jump. That's just how the writers wrote them: as violent, amoral, xenophobic imperialists. Yes, the Federation et al should be more careful about wandering through a magic door to the other side of the galaxy and start measuring curtains and getting huffy with the locals, but the response from the Dominion on every level was way overboard. The Dominion should have announced themselves properly at some point before there was essentially already a war happening, and the Federation should have mostly stayed on their side of the wormhole until they could reliably establish relations with whomever was on the other side. I think war would have happened anyway, with the specific inciting events in the show equivalent to Archduke Ferdinand getting shot and causing everyone to lose their minds subsequently (not to lean too far into the World War One comparison).
Yeah, that's over a year
OK fair point, but if I remember correctly, the Dominion were introduced when the Jem'Hadar ships destroyed a Galaxy Class ship, and I think the Vorta brainwashed Sisko for a bit (I don't remember it perfectly, but I think this was the case). And then they made bunch of threats, just a ton of hostility right off the bat. I really think their diplomacy was shitty, and they should have opened by sending an embassy or something.
They're spoken about earlier. There's those refugees thst wanna live on bajor and a couple mentions here and there. The Jem Hadar thing was set off by Jake Sisco wanting to go explore the gamma quadrant for a junior high school science project, this doesn't speak to much if any respect for people who may already lay claim to the area. Seems odd that the second group of guys we see from the gamma quadrant are under dominion control if their territory isn't at least real close to the wormhole. You'd tend to assume the people living closer to it would go through sooner than those who'd need to take a longer trip.
The fact that those refugees felt safe near the wormhole indicates that they didn't regard the territory around it as Dominion territory, indicating that the Dominion didn't have a legitimate claim to it at the time.
And you don't think that starting a battle that leads to the destruction of a ship that houses over a thousand people is a bit of an overreaction to a couple of adolescent boys doing a school project? Seriously, there's just no way to write the Dominion's actions as reasonable here, even if their grievance was legitimate. The Alpha Quadrant had been peacefully exploring and trading with the Gamma Quadrant for over a year before the Dominion suddenly shows up and murders over a thousand people. That's a horrible political misstep by the Dominion that was certain to provoke hostilities. They should have sent some Vorta over to the major AQ powers as ambassadors to make their case first.