The most important issue with wars inside Yliakum is simply that Yliakum is small. It is way larger than what is ingame ATM, but it still is only about the size of an average RL kingdom. If the information in the geography book at Jayose's is even remotely correct, then it is even possible to stand at the cavern wall one side of the first level and see right to the other side's wall! Additionally, there is a large hole in the land. Also, the land is 3D, not essentially flat like IRL, so the maximum distance between any two points is much smaller than in an RL kingdom. Add to this that one can already use very speedy transport (Pterosaurs) for important matters (like government business) and magic (even if it's by far not all-powerful), then it becomes clear that running such a country is much easier than it is IRL, and even RL kingdoms rarely had internal wars.
The general feel of Yliakum is that of a "golden era", seeing that a large percentage of the population is literate and science clearly is thriving everywhere.
The Char Creation itself feels much like a temporary placeholder to me. The options that were brought up aren't the only ones that don't really fit in with the setting, so it shouldn't be used to found RP on (even though this is very unfortunate, seeing that it is the only settings-like thing that most newbies are exposed to ATM). Staying with the matters on hand, the conflict between the settings and the CC is not so much "How can a political career fail due to assassination if the government is good?", and instead it must be "How can there be a political career if the government rarely has any elections?".
The government of Yliakum certainly isn't perfect, and the setting doesn't imply that AFAICS. It does, however, imply that there is some sort of effective democracy, since officials that are too much out of the line can be removed by several, even organised, means. However, it also implies that this is rarely necessary.
How is that possible if the Yliaki don't think radically different from RL humans (which they might still, as it would take only a little less greed and pride to have a more stable society)? The answer to this is is also in the setting: Talad. There once upon a time (hundreds or even thousands of years ago, though), there almost was a civil war, between Ylians and Enkidukai about ownership of the first two levels (for farming). The conflict has long been resolved by Talad himself intervening, and the Korogan passage is the most prominent (only?) remainder ftom that time, a monument of peace.
Thus, obviously even in the case of the Yliakum government failing catastrophically, Talad can be expected to stabilise things. This leaves plenty of room for the odd murder and some thievery, even for intrigues and such, just nothing earth-shattering.
The government itself doesn't seem to be god-given, and therefore it certainly is possible for people to think up alternate concepts ("I can do better!"). However, due to the comparatively stable society, they'll not easily find followers, and will need to look for unclaimed land outside the stalactite (knowing that there will likely be no Talad to stabilise things).
In another thread there already was some argument about the rogues, and I still think they are there simply because there's no other place to put them yet, so more or less OOC, yes.
