In what way is that not a despotic tyranny? Or are we going down the nit picking road that I'm not using exactly the right word to describe this?
It's not nitpicking if you're going for only the most technical definitions of the word and over-applying it. Being a tyrannical despot suggests oppressive rule, few or no rights, threats or actuality of violence, and rule by fear.
From the
most technical definitions, where you strip the words down to their very earliest definitions, you're sort of right--although even then, only sort of, because tyrannical despot also means a
single leader, and Waterdeep has a Council, and Greyhawk holds public elections for at least some of their offices, and apparently has legislative, judicial, and executive branches where the rulers have limited areas where they have power.
When 99% of gamers hear tyrannical despot, they're going to think something like Falkovnia (especially pre-5e) where the citizens live in constant fear of being extorted, enslaved, tortured, raped, or killed for any reason at all by the ruler or their goons. They're
not going to be thinking a bright, open, clean city where everyone has rights and few fears. So it's very disingenuous to say that 99% of D&D cities are tyrannies ruled by despots.