How to cope with local domination?

Reach out and develop new players, and talk to them frequently to prevent newbie burnout. Casuals will still play if their friends are still playing. Outside that, just make sure to hack the enemy portals as much as you can. If you have a good group playing together, you can all focus on taking down one portal and defending it before slowly starting to expand.

EDIT: To expand on this (as I'm finally playing in a real city with lots of portals) it actually could be considered beneficial to play in a dominated area. You gain experience ("AP") for hacking enemy portals but not your own. While you do gain more experience for capturing portals, deploying resonators, and creating links, at early levels you wouldn't be doing much of that anyways so the ability to gain AP from hacking is invaluable. Once you're level 3 or so you'll want to become more active in combat though. I'd also suggest looking for a local group that plays to get high level help. If they can knock down a portal you can capture it with your resonators and then they can upgrade it so everyone gets more AP.