You mean like the city states of ancient Greece and the bang up job they did holding off the highly centralized imperial powers of Macedonia and Rome.
Or in the Renaissance the great job the city states & local ducal powers of Italy did in keeping the imperial powers of France, Austria & Spain from interfering in their affairs.
No, I mean like the bavarian states prior to the formation of Germany or like the cantons of Switzerland.
Centralization and size are the problems. My proposal is not the be all and end all, but without size, there wouldn’t the concentration of resources to develop nuclear bombs and other expensive, advanced weaponry.
It is a problem when an aggressive centralized state confronts a decentralized system. In such cases, a common defense must be made.