I have read a number of analysts who believe that we are headed or must head into an era where we are organized into smaller units and perhaps villages would be one of those. Many have a similarly utopian bent. However, there are all sorts of issues with moving back toward ‘village’ life.
In coming together around a particular vision and path like the one described, the ‘advantage’ small countries and small towns have is homogeneity. It’s easiest to get together and agree when most everyone is of a similar demographic. But this can also, of course, have less happy consequences for those not so similar and for any real diversity of thought and perspective. I suspect that’s why the passports were tried.
There are also just the obvious lessons of history that have always shown that organization into ‘villages’ is extremely vulnerable to cycles of conquest and subjugation. Likewise, feeding and otherwise supporting populations of millions and billions requires massive capacities for production, including a great many subsidiary ‘parts suppliers’ that tend to re-aggregate people into the needs of these larger productive, defense, etc., enterprises.
So, lots to think about in terms of local development and experimentation, but also in terms of sustainability, etc.