@Sean Timarco Baggaley
Thank you for pointing this out. I had not considered whether the Canton system (which is still a representational democracy) in Switzerland was applicable in the UK, but I suspect that such a system would not work here.
The Swiss population is small at just under 8 million. It has 24 Cantons, and Switzerland itself is a federal state made up of these Cantons. The population of the Cantons range from under 1.5 million down to just over 15 thousand. If we had something similar in the UK, we would end up with something over 200 regions over the population size of 100,000. We have 650 parliamentary constituencies, which means that one Canton would equate to something like 3 parliamentary constituencies. Trying to run a federation of this number of states would be much worse than in Switzerland.
Alternatively, we could escalate the county structure to become more state-like. This would give a much smaller number of states, but would end up with huge inequities, as there is huge variation in the population and revenue of the current counties, and would lead some 'states' running a permanent deficit.
Either way, the resultant federal government would be difficult to run, and would would still end up with things like surveillance and security policy having to be centrally run in a way that would not be that dissimilar to our current parliament. It would still be necessary to arrange voting blocks to get any large decisions made.
I suspect that the reason why it apparently works in Switzerland is because of how insular they are. They do not have a prominent role in foreign politics (you particularly mention warmongering), or world trade. The result is that there are fewer issues that require a referendum. They regard themselves as being too uninteresting to be invaded, and this policy served them relatively well in the world wars last century. This may be a good thing, but if every democratic country moved to a foreign policy where they hid under a rock, it would not be very long before more aggressive and territory hungry regimes were knocking at their borders.
Switzerland does not really have to worry about this at the moment because they are surrounded by relative benign states (France, Germany, Austria, Italy and Liechtenstein), and are not very attractive to invade anyway. If they had a border with a country like Pakistan, Somalia or maybe even Russia, I suspect that they would be significantly less insular, and worry about defence and foreign policy rather more than they do at the moment.
It will be interesting to see whether when water becomes a constrained resource, Switzerland alters it's foreign policy!