I've always operated with the understanding that Coalition of the South Pacific is the official name of the region as defined by the government, just like the Federal Republic of Germany or the United Kingdom of Great Britain and Northern Ireland, rather than as a separate entity that happens to govern the region.

It's worth pointing out that we already tried to have other regions "join the Coalition" during the delegacy of Southern Bellz. I haven't done much research into it, but I don't think it was that productive, nor do I think there was much success with the sole region that joined. True, times have changed, but all things considered, I don't believe colonising or forming some kind of confederation with other regions is consistent with our regional values. Our aim is to achieve internal development, not external expansion.

In terms of your actual proposal, I think you are confusing the role of the Local Council. Glen can correct me, but the whole idea is that it would establish itself as the kind of local government that the gameside community wishes to have. It could be a more political body that issues plenty of ordinances, it could be a more culture-focused government that promotes activity and festivals, it could be a mix of both. But the key here is that the onus is on the Local Council to develop that.

You call the Local Council a token, but I think it's a rather ingenious institution under its current format. It has little regulations under regional law, and that affords its members and the community they represent the chance to decide how it will be structured. Should the Government offer assistance and guidance? Absolutely. I think it makes perfect sense that the Government and the Local Council should work together to enhance one another.

However, I think you are assuming too much regarding the need to have a fully political body for the gameside community. They don't necessarily need a full set of laws, a full slate of elected officials and a cleat set of responsibilities for each. That sounds more like forcing most forum responsibilities upon the gameside community, and leaving the regional government to handle basic matters, like the United States under the Articles of Confederation.

TL;DR: I think you are mistaken about what the Coalition actually is and have the wrong idea about gameside covernance. We should definitely assist the Local Council in finding their north, but the kind of reforms you propose don't seem workable or positive for the region.