The Land of Grass was probably only half the size of the Land of Rain, but it was extremely weak. Compared to the Land of Eddies, which had been besieged by Ninja Clans across the entire shinobi world, it was laughably pathetic. After the Third Shinobi World War (after Karin's birth and after the Nine-Tails Rebellion), it had nearly been destroyed by the Kaguya Clan.
That's right.
Just one Ninja Clan.
So, during the Third Shinobi World War, Kirigakure had not yet purged the bloodline-limit clans within the village. (Note: The Kaguya Clan was also the Taketori Clan. Some say it was a translation error, but everyone is now used to calling them the Kaguya Clan.)
I did make revisions earlier, changing it to ten thousand people, bringing the total to over thirty thousand.
Also, in the early stages, Nagato had actually developed freely. Madara and Black Zetsu never paid attention to him; as long as he did not die, that was enough. After Obito appeared, they destroyed the early Akatsuki Organization in order to guide him into darkness and awaken the Demonic Statue of the Outer Path. But after Obito joined the Akatsuki Organization, they ignored him again, merely guiding him in the general direction of collecting the Nine-Tails. Even when the Rinnegan was used, they only felt regret before taking back the eyes. It could be said that Nagato was really just a container for the eyes at that point.
As for whether small countries combined shinobi and political administration, Salted Fish was not sure either. It was basically analyzed based on the Land of Snow. In the Land of Snow, the second son usurped the throne and inherited the positions of daimyo and Ninja Leader. But Salted Fish had written about both possibilities, and no matter how