Flat earth - people believed the earth was flat, even though in reality it is round. Similarly, whereas you may believe yourself to be on the side of LG, on one side of this 2d diagram, in fact that diagram is actually a globe and you are in fact on the other side...in much the same way if you give a globe a couple of turns, America is in the East, relative to you.
Ooh it's a minefield.
But in game it does give a framework to work within and when they were alignment violations to be had, it gave a good map as to where your actions were taking you. IMO.
Humor aside, very few people actually believed the Earth was flat by the early Medieval period, let alone Columbus' time. Artistic depictions of the Earth viewed from outside (e.g. by God, from Heaven) in Medieval art, for example, are difficult to sell as anything other than orbs.
As for the actual Alignment stuff, does this really mean anything? If the system is globular, then it's more accurate to speak of
poles of alignment rather than
sides, otherwise you get Good and Evil (and Law and Chaos) butting right up against each other. (You also get serious oddities because a 2d square/rectangle cannot be smoothly deformed to cover a sphere.) At which point it is trivially easy to reconstruct the original layout--you just end up having two True Neutral regions. You can, in fact, construct a nearly identical concept by looking at a tidally-locked planet with a strong magnetic field oriented perpendicular to the orbital plane: it has a magnetic north and south pole, and it has a "dark/cold" and "light/hot" pole due to the tidal locking. There's only one place where you're at "magnetic south," but there are two places where you're "exactly halfway between north/south AND light/dark." If you look at the "light" hemisphere, you'd have a ring of twilight (neutral on the light/dark scale). Slicing the planet radially (that is, cutting it exactly in half in the direction of the radius of its orbit) would exactly reproduce the 9-square alignment grid, just shaped like a circle.
Edit:
And yeah, "chaotic" and "lawful" really aren't the best. Honestly, neither is "good" and "evil" really. Very few people think of themselves and their goals as "evil." They think what they're doing is the Correct Thing To Do, which is usually considered the Moral Good even if it involves unpleasant or socially disfavored things. I made a halfhearted attempt to find better ones, can't find the file I saved it in now. I want to say I substituted "Pragmatic" instead of "Chaotic," but I don't really remember now.
Basically, my understanding of them is that the
ideal for Lawful is "a place for everything and everything in its place," with a reliable and consistent answer for each situation as it arises. While the
ideal for Chaotic is a stable anarchy--all entities purely independent of each other, though they may associate if they feel like it, until they don't feel like it anymore.