Design Monologue 22: The Not-so-long Arm of the Law
There is a simple explanation for the DMZ and rogue states.
In the beginning, there were jumpgates. This Abelite technology connected the Homeworlds, linked the colonies, and made the furthest-flung outposts of civilization just around the corner.
Then came the Earthgate War. Many jumpgates were destroyed, in a futile effort to save the Core Worlds from imminent destruction. It turns out drones can hotwire any active jumpgate. Every existing jumpgate became a portal to Earthgate. They all had to be destroyed, never to be rebuilt.
The Outer Colonies used to be days or even hours away from their Homeworlds. It was a very Homeworld-centric civilization, with the strong central powers able to effectively police every corner of their empire.
Now, suddenly, the Core Worlds are light-years away from their colonies. Even with the new warp drive technology, their former Outer Colonies are weeks or months away at best speed.
Not since the expansion of America in the era of the Wild West was it so difficult to bring order to the frontier. To make matters far worse than they were in the 19th century, both the Core Worlds and the Outer Colonies suffered grievous harm during the war. The destruction of crucial jumpgates, and the subsequent decades of isolation from the Core Worlds did not exactly endear the survivors of the Outer Colonies to their former masters.
Those strong enough to last the war soon rebuilt civilization in their own image. The ones with guns got all the power; they soon had all the resources, and anyone who wanted to live had to flock to their banner. The morals and ethics of the Core Worlds were considered luxuries on the frontier.
The Foundation offered universal peace, but much of the Outer Colonies wouldn't have it. There was a long civil war, with each rogue state trying to grab as many systems as they could. Their governments were too volatile, and their culture too diffuse to truly become major empires. Their efforts collapsed, but the Foundation did not prevail. It became obvious that it was impossible for the Rogue States to beat the Foundation in open combat, but also impossible for the Foundation to truly dominate the region.
Thus, a treaty was signed, recognizing the governments of the Rogue States, and creating a Demilitarized Zone where neither Foundation nor Rogue State would extend sovereignty.
The DMZ soon became a haven for refugees fleeing the Rogue States' tyrannical rule, while at the same time, it offered new horizons for daring entrepreneurs.