Well, from what I've observed and Damien and Antefalken have told me, it's a federalist sort of thing.

Actually, the EU on your Earth, might be the best example. The city-states have territory around them and they appoint/elect members of the Council of Magistrates based on each city's rules. The actual Council of the Council of Wizardry is voted on by all the members, although the current council gets to nominate people for approval There are also rules for external nomination as well. It's usually a political thing trying to get the best, the brightest, most influential and in many cases, the most expedient member.

Most of the citystates use a guild-style democracy to elect officials. There are some members of the government elected at large, depending on the city.

In any event, the two councils have binding authority on the areas of their province, specifically in terms of intercity standards and trade, as well as overall trade. Very much like the EU or the US.

But again, not so absolute as the US or EU. Turelane is not part of the City States, but Randolf does sit on the Council of Wizard. Same for example for Lenamare, Zilquar, Exador and some other mages. They are nominally part of the Council States, but because they are more private entities with their own domains, you could think of the Council States as being like NATO.

The Council of Magistrates are only from member citystates and thus that is like the US/EU, but tangential "Magedoms" (Turelane, various wizard schools, and powerful wizard-lords [Exador]) are NATO like members through the Council

there really is no good single current Earth example.