I've always been intensely interested in the way different forms of government handle the problems that always come with leading a city, country, or empire. It's part of the reason I got into political science, and it's part of the reason I've been the main DM in my group. To me, it seems that if I have a handle on these big picture issues, it's another obstacle that's out of the way. Of course, one can argue that it rarely comes up in the day-to-day and session-to-session operation of a campaign, but at the same time, I think things could grind to a halt if these sorts of things weren't at least thought of beforehand.
Having an acceptable system of governance in place can also help build a sense of immersion in a particular campaign experience. Even if the characters, or even the players themselves, aren't aware of the way laws and acts and what-not are developed in a city/country/empire, it still gives me peace of mind as a DM. If it ever comes up, I have that government and political culture thing handled.
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On another note, I'm quite enamoured with creating different forms of government for different entities. Often, I do it much in the same way that an author might write a mystery -- starting with the end and working backwards. I'd start by saying, I think this country should be a "Constitutional Theocracy." At that point, I would formulate a quick and dirty set of history, events and that sort of thing to lead to a specific political culture that would support such a government.
I guess it would be quite comparable to creating a character with a specific idea in mind. I want this character to be able to do (this) well, and do it for these reasons. Therefore, her background would be constructed with the end result in mind. Top-down creation, basically.
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There are so many forms of government out there that it's difficult to construct any list that would be considered worthy. There are so many forces at work when constructing a political system -- culture, geography, foreign relations, racial composition... It really depends on where you want to start. One could start with the people and work up from there...
"Dwarves are like (this), so with a level of political complexity in mind, they would have a government that would look like (this)..."
Conversely, you could start with a government system in mind...
"I want a harsh and militant theocracy and I want it populated by elves. Now, how can I mess with the elves in order to have them arrive at this system of government?"
There are a myriad of permutations in this process...
"I want a well-meaning, but ultimately meddlesome, Mercantile Oligarchy that would act according to what it saw as universal truths. Now, what sort of people would live in such a society? 'Obviously' there would be humans at the forefront, but I can see other races involved here."
And...
"I have a race of impatient, paternalistic elves that are so convinced with the superiority of their culture that they would impose their views on other, lesser races. What sort of government would they adopt? An imperial system perhaps..."
Etc, etc, ad infinitum...
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Magocracy, Technocracy, Monarchy, Oligarchy, Theocracy, Democracy, Anarchy (Collectivist or Individualist)...
Federation, Confederation, Republic, Kingdom...
Benevolent, Liberal, Conservative, Dogmatic, Despotic...
So many qualifiers, descriptors and adjectives!
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To be honest, I don't think the political and economic aspect of fantasy has been explored enough. I can think of a load of hooks that could have nationalistic/etc player-characters adventuring for dozens of sessions. The problem, however, is getting those players to be able to get into the mindset of their civic/national/imperial interests and act accordingly -- and reliably.
We should start a project someday, just creating a single nation-state or empire in detail, one after the other. I think it might be neat, but that's just me, the Political Scientist.
- Rep.