WotBS wotbs 4 or What's the deal with Seaquen?

Setting up the political land mine of module four, it seems like Dassen/Seaquen have a contradictory political relationship.

So Seaquen seems to be some kind of independent city-state within the borders of Dassen. Then I read further.

Leave aside the player's/gms guides (I don't recall seeing a sufficient explanation in there), the monologue by Balan where he is laying out the Dassen mission really stuck this home.

Seaquen can't muster enough defenses against Ragesia on its own
Normally they would request assistance from Dassen since Seaquen is officially a part of Dassen (though they don't pay taxes).
Currently, Dassen has a non-agression pact with Ragesia and are allowing the army through (to invade "part of their country")
We don't want to officially ally with Dassen
We want to offer assistance, not pledge loyalty, not joining "his country", and certainly not paying taxes
We're not a sovereign nation

Huh? What exactly is the relationship between the two? Why should Dassen give a fig about Seaquen when the latter has no interest in paying for that protection or even being fully declared allies?

Some of the early stuff in module 4, with Simeon, is just the headmaster being irrational and anti-big-government.

Unless they changed something between the 3.5 and 4e versions, Seaquen got permission a long time ago to set up their school in a part of the country that's really hard to reach by land, has few farming prospects, and thus would be hard to have a normal city at. But it's still strategically important, and it's better to have a group of guys who kind of like you there to make sure an enemy fleet doesn't use the place as a base, than to just leave the peninsula empty.

Seaquen is kinda like Puerto Rico is relative to the US. They generally like each other, trade frequently, provide something of value to each other, but the little protectorate doesn't pay income taxes because the main government doesn't have much of a presence there.

In adventure 4, Seaquen wants to convince King Steppengard that Ragesia is a threat to Dassen, and that letting the Rags march through their land is a bad idea.

(In hindsight, the line about 'not officially allying' should probably be taken out. In my mind, they might not technically be allies yet, but Seaquen would definitely see value in making a mutual 'we'll defend each other' pact.)