I think this is a great idea, the more the game moves in this direction. The better and more interactive it will become. As for politics, for this to work. There has to be a real effect. By this i mean, the person would have to real power within the game. So if say the postion for captain of the guard i Hydlaa. Was open: The player might have to set some kind fo tax. Say 10 tria every time you want to enter the city. Out of this budget, he would have to pay the guard wages.
If the player decided not to pay the guards wages, then they wouldn't work. Which would have real in game effect, such as no strength training avilable. As this guard would be at home. Which might make some players unhappy, therefore leading to this player being sacked. The positive spin, of paying to much in wages might be more guards with other training options. Therefore more happy players.