The model you are talking about is terribly easy for anyone with a sufficient lust for power to control. You see it all the time in Africa and the Middle East. Warlords gain a bit of power and start taking over territory and eventually build a small army. With said army, you take over transportation or simply rape and pillage.
Even without physical violence, economic control is equally possible with a sufficient monopoly (which, with no regulatory system to prevent dumping, tying, etc., isn't that hard to build). Control shipping, an important bridge, a major highway, waste disposal, etc. and you can effectively blackmail any of your neighbors' "sovereign" lands.