Another good example of decentralised government is Classical Greece. There were between 1500 and 2000 independent Greek City States in the Mediterranean before Alexander the Great.

Each was independent and sovereign. The decision center was local. They participated in military alliances (often shifting) and commercial networks. Many were founded as colonies by other cities, but quickly became sovereign and even fought their founding city. Distance and technology made this local decision making a necessity. Some cities were democratic, other has tyrants or monarchs, others were what we would call theocratic. Many changed government system multiple times.

But for a very long time this system was stable, sustainable and growing. It was the natural state of affairs for Greeks since the time of the Mycenaeans and maybe even earlier with the Minoans.

For 1000 years decentralisation to the city level was seen as the logical and natural way to govern.