you give some interesting questions. the first part can be stated simply "any body of government can be, generally speaky, either a monarchy (ruled by the one), oligarchy (ruled by the few), or a democracy (ruled by the many)." quite simply your kingdom could follow any of these three forms of government with your channeler as the leader. the second half, i personally think having heroes with a place origin can sort give a game more depth...
think about it; Hero A was born and raised in Town A but now lives in Town B. the two towns are at war with one another and depending on the Hero's own moral alignment or level of loyalty to his homeland would either prompt to fight against Town B or turn Benidict Arnold.