Aurvandil cheated, to make it short. A lot of their locked accounts are still counted by the various stats page, and will be until the game removes them. Their "underdog" situation, combined with illegitemate might, made them a very attractive realm for a bunch of different people, who desired to profit from their strength. As such, their strength allowed them to get more strength. The cheating also allowed them to get endless funds from multies set up in a ton of realms in other continents, allowing them to field huge armies despite being a small realm without any significantly wealthy regions.
As for D'Hara, you don't get spammed with letters every day, but there are various message groups that do have decent chatter and which you can join, either off the bat (Midland Council) or over time (House of Lords). There are a good numer of players, however, who readily participate in things that others start, and we regularly have RPs that have nothing to do with measurable IG objectives. One example is the monarchy. As you pointed out, the realm is a "monarchy" with a Prime Minister. While it may seem contradictory, it's basically the same thing as the british Commonwealth. We've always had a King, but since the last Dragon King autopaused, we RPed him as a background NPC, and run the realm as a republic with quarterly elections for every position. The House of Lords is the reigning body, and they decide most things one way or another. However, we recently RPed the old Dragon King's assassination, and my character was elected as a replacement, though he has yet to be crowned. And it all started with a few people wanting more than a mere NPC nobody really played, and everyone pretty much went along with it. As such, if you want to start things, there are good chances a decent number of people will tag along and participate. If you stay silent and don't ask to get included in any message group and don't try to get any promotions, though, then you'll miss out on a lot. But that's to be expected pretty much everywhere, imo.