Didn't the Federation also cede worlds to the Cardassians during TNG's 7th season. IMHO if you'd just won a war, you won't be ceding territory even for peace. Remember the Federation had to remove whole colonies which led to the Maquis and armed resistance against the Cardassians...hardly a victory...
Arise, arise, Riders of Theoden!
Fell deed awake: fire and slaughter!
Spear shall be shaken, shields be splintered,
a sword-day, a red-day, ere the sun rises!
Ride now, ride now! Ride to Gondor!
Theoden King: The Return of the King