I think what a lot of people fail to grasp is the ability to unite a diverse group of realms that this empire brings to the table. They need not always be friends and allies, but they can unite behind a common cause. After uniting behind a single cause they can unite behind other issues.
I am confident that the Phoenix Empire will be a success as long as Coria remains with full strength behind it. The question is, whether Merlin has the capability to pull together his realm behind his dramatic and fast changes to realm policies. If he can do that, then he'll be able to easily operate as Princeps of the Phoenix Empire.