ok, here is my idea:
1) To make a nationality, we have special Flag spawn that holds a flag to your nation. This flag can be designed with a GUI. The Flag is a vehicle so you set the spawn brick up like a vehicle spawn.
2) The GUI can also upload existing flags to make the colony part of an empire, but if the colony founder isn't the empire founder, he becomes a governor of that colony, but must also follow rules of the other colonies if required.
3) A revolution may take place if the governor or the people want independence of the empire, but they have to create a different flag or use another existing flag to try to join a different empire.
Here are some models I made, they are not perfect, but they are a basic platform to build off of:
Flag itself:

Top of the flag:

Bottom of the flag*:

Flag Spawn*:

*The Flag and flag holder feature a new kind of building material Lego company makes to use with Bionicles and such, no one ever thought to add to Blockland.
Sorry for the .jpg pics. I'll upload different ones tomorrow, but right now I'm tired. Criticism welcome.