That's essentially how it works. There was a great empire that broke apart. The pieces that weren't immediately captured clumped together to form 40 or so tribes. These tribes decide that they need a strong central leadership, but they argue over who should rule. So, the tribes create a series of tournaments (more like battle royale) and decide the winner of the tournaments will rule over all 40 tribes.
The tournaments will be split into several parts. A tribal phase, a regional phase, and a national phase. The first phase is just each tribe trying to figure out who will represent them in the regionals. There are about 5 tribes to every region. In the nationals, the regional leaders go up against each other for the throne.
In between, the tournaments there will be some more traditional adventure type stuff. Oh, and as the battles go on, the main character will be approached by parties with their own ideas on how the new country should be ruled. I plan to have a democracy route, socialist republic route, communist route, anarchist route, and traditional monarchy route. I also plan to include a "fuck it, I'm the emperor and you all belong to me, now" route.
I also plan for there to be five beginning classes: swordsman, battle mage, archer, monk, and rogue. During the time between each tournament, you can go explore and train in different classes. Like a monk can become a priest or a holy warrior. An archer can become a ranger or a sniper (as in, a bow sniper, not a modern sniper). A battle mage can become a conjurer or an elementalist. The class system's not really set in stone right now.
Before anyone asks, attacks on the outside tribes by foreign powers makes a strong one-man leadership a necessity...ruling out the possibility of some sort of long term tribal council or congress at the beginning. However, I am planning to include a democratic route. You just have to take control first and then start rationing powers out to different regions.