I'm not saying it would be a particularly good system to copy, but the old Swiss confederacy is probably the prime example of self governed city states bound only in an alliance, i.e not through a monarchy. What came out of it (after some Republicanism was forcefully infuced by Napoleon) is something most Swiss are very fond of - a federal Republic with a very modest central government and checks and balances on steroids (via direct democratic participation that can overrule anything the elected leaders can come up with). Governance as local as possible makes sense for many things - not all though.

Effectively Switzerland is pretty much a one-dimensional (only 30 to 70 km in width) multi or triple center city-(cluster) state due to it's economically usable geography wedged in between the Jura and alpine Mountain ranges. This 300 km long plateau only covers about 30% of the Swiss total land area.

Geneva plus Lac Léman region (Lausanne, Montreux) on the one end. Seperated by the "Röstigraben" from the German part of the Swiss Plateau, which itself is culturally divided by the Brünig-Napf-Reuss line[2].

https://en.wikipedia.org/wiki/Swiss_Plateau [1]

https://en.wikipedia.org/wiki/Br%C3%BCnig-Napf-Reuss_line [2]

Agreed, up to one point: I'd argue that looking at it as a triple city cluster is too much of a simplification - these centers are simply not large enough to render the others insignificant. I.e. the Berne, Lugano, St. Gallen and Lucerne urban und cultural areas aren't totally insignificant compared to Zurich, Geneva/Lausanne or Basel. Switzerland is simply too multifaceted to reduce it like that.

Fair point, forgot about those sensible Swiss.

Well, if you look at the Old Confederacy, you were only really wrong in one account: the assumption that it needs to be a monarchy. These fellas were rather fond of going into battle, it's just that all out war has somehow been avoided since the mid 17th century.