Re: Could this idea be more backwards?
Except every single method you propose has fatal flaws.
1-2) People will CHEAT and then hide the fact they're cheating. Humans will be bastards if it'll give them a leg up on their neighbors. It's damned near instinct.
3-4) NOTHING scales well for 7 billion (and direct democracy pretty much doesn't scale past tribal size), and unless you have a system that can encompass EVERY human, one side or the other's going to feel slighted and want revenge.
5) Eventually, two such blocs will end up at odds. Usually over resources like arable land or women. If it can happen to two people, it can certainly happen to two blocs of people. Geography WILL matter at some point because the Earth is finite. EVERYTHING is finite at some scale.
6) Except when there are too many people. You eventually end up with a "Baker's Dozen in an Egg Carton" situation: too many people for whatever geography can accommodate. At that point, war isn't just desirable, it's inevitable. Either SOME die or ALL die from sheer exhaustion of resources.
7) And many humans hold grudges. If you screw someone, you risk an act of revenge, and some people see Mutual Assured Destruction as an acceptable scenario in that context.