Microstate theory. Hundreds of allied factions, working under a multitiered government where the top level only deals with those things of truly national or global importance, defensive militia-type armies and friendly trade with all not part of it, while still quietly encouraging similar revolutions in those nations. Anyone invades, wesend 'em to the stone age with an army where every civilian is a trained soldier at the drop of a hat, saturation-nuke the bastards in their home country if we can, and never have anything military of ours leave but missiles. Each population-based microstate works on its own local government, somewhat resembling Athenian democracy, and each is grouped into larger regions with similar ones in the area, to deal with larger issues. Repeat on a bigger scale as necessary- there is no size limitation, because the larger the government, the fewer "local" issues and laws are dealt with, and the more inter-regional relations.
Oh, and I wouldn't bank on a technological edge cutting it. For one, we'd be able to steal tech and get defectors, for another, as an0n said, Vietnam. And that's not the only example, though probably the only one commonly known about.
