Following the revolution in Maguzapach that established the Empire, the Empire has decided to revoke the autonomy of the region of Hugoland. Hugoland is autonomous to the point of being practically independent, only lacking it's own foreign policy. Technically, it lacks its own army too, but it does have militias and paramilitary forces.
Hugoland has always been the richest and most democratic part of Maguzapach. Under the Republic, the rest of Maguzapach was ruled by a highly technocratic government with few elections. All government officials, including those elected had to hold certain degrees, thus limiting the ruling class to graduates of certain universities.
In contrast Hugoland has many aspects of a liberal democracy. (In some ways comparable to Hong Kong and its relationship to China)