So I am looking to structure a country so that there are other areas that are "free" to make their own laws but pay a tribute to the main country. I know that there's historical precedent (Rome's a good example). I am trying to get an idea of the practical advantages and disadvantages to allowing mostly local laws to hold sway over the outlying bits of an empire/country (consider that it is geographically continuous, although there are mountainous bits and Southern Isles).
It all depends on the technology available, as always. This text is being written without sources, and should be considered a mildly-educated opinion. (i studied sociology, but only as a second field, and i didn't have the best grades).
For this answer, i shall call the primary country the "country" and it's parts "states".
Decentralization - the good
Giving your "states" freedom allows them to accomodate better to their individual requirements. A country-wide law banning a certain fertilizer might not harm state A, but state B has a harsher climate, and absolutely requires this fertilizer to grow anything. It also allows for better fit of culture and law. Maybe your country has several tribes / people / cultures living togehter, and giving the states more freedom allows upholding their traditions better. Imagine a country with 50% muslims and 50% christians, but state A has mostly muslims and state B has mostly christians. By allowing each state to set individual holidays, both cultures can uphold their religious holidays and both are happy. A country wide law could declare both, either or neither of these dates holidays, resulting in the industry, either or both factions being unhappy. So, another BIG BIG point is happyness. allowing regional laws, administration etc... makes the people happier. Because of above reasons, but also because they feel are more in control, the "way up to the power" is shorter. Finally, if your states consist of conquered territory, giving them more freedom makes the feeling of "being conquered, and now shamefully working as slaves to a foreign ruler" a bit less painful.
Decentralization - the bad
Decentralization has several disadvantages, too. For one, the country lacks control over what the state does. A state pushes it's own hedonistic, anarchic, selfish culture as the only way of life, creating unrest und dispute between the states? Bad luck. Also, the same freedom that keeps the people in the states happy can cause them to become unhappy, too. State A has 41 holidays, you pay 12% tax less than everywhere else, you don't need to go to military sercive and they pay you 1000 credits if you move there? That's nice, but is that gonna make the people in state B happy? Probably not. So people might start immigrating, moving, and the country faces the problem that it's own states are "fighting" among each other. Also, you have a harder time establishing a "sense of nation". If the states work very independend from each other, and state A is attacked - state B might not feel compelled to send help, and even if they do, the soldiers might not feel like defending their home country, but more like "helping the neighbour". People might feel proud to be a citizen of state A, not the country. This might lead to problems with loyalty, especially when recruiting members for country-service, since their loyalty to a state within the country might make them corrupt or at least biased in their interests.
Sometimes it is necessary for a country, that all states "pull one rope", e.g. to establish a common space station or some similarly expensive project. Independent states might be hesistant to go for it, or use their powers to force the country to drop their project, for example by blocking other projects where possible.
Decentralization - the ug... erm, the reasons
So far we found arguments for and against decentralizing your government. But in some cases, decentralization becomes a requirement, not a choice. And that is when your country becomes larger than technology allows. When the fastest means of communications is a man on a horse, certain "response times" become too long. Asking for permission to fight an invading force? Okay, wait 6 months until we can grant it. Economic crisis requiring immediate reaction? Well, 2 months until the courier reaches us, 1 month to decide, 2 months to send someone back, who then gets lost, 4 more month until you notified us, then we send another.. ah, nevermind, damage is done.
Sometimes, reacting to immediate demands requires a government right on the location. Of course you can limit their powers, but granting them more powers makes the government much more effective. Everytime i send a message, it costs time and thereby directly and indirectly money. The fewer messages i have to send, the cheaper the system becomes. A local government can react faster and more approprietly. For them, gathering additional information is much easier, they might know the local situation, special circumstances and even some or most of the people they govern. A central government might make decision based on insufficient information, and might deem it too time consuming or expensive to gather more information. They also have to factor in that 100 less-than-optimum decisions might still cost the country less than sending messengers all over the place.
With advancing technology, a proper mail system and ultimately long-distance communications, centralizing a government becomes the better choice, because you do not need to employ so many people to do the same job, and ironically, the time until a decision is made DEcreases for a properly centralized government. You can gather information as required, and still have the "big picture" in mind when deciding. A local government might have the local picture and can decide best whats good for the STATE, but they cannot possibly have a good picture of whats up in other states or the country overall. So with proper communications, centralization is much more effective.
Advancing further through technological advancements, with introduction of interstellar space flight, decentralization might again become the instrument of choice, as the distances between stars make communication harder again... until you discover FTL communications... and so on...
- Conquered people may be more willing to accept a new overlord if they can keep their own laws. Who cares if the Duke has to pay homage to the new Emperor and not to the old King if life goes on as always?
- You can also "finesse" the degree of fealty of outer provinces. Say the king of some distant island sends tribute every year, and the emperor sends a subsidy for the local naval squadron. By custom, those two payments balance. Everybody gets to keep face.
- Local laws may be designed to solve local problems in an equitable way. If drought is a problem, the law will spell out how water from a creek gets divided. If flooding is a problem, the law will spell out who has to maintain protective levees. A law that tries to do both will be confusing.
The real reason for allowing other areas to be free is that they are too far away to control. In a pre-modern world, without efficient communication, the only real advantage of conquering a place was carrying off all the loot. So once the place stays conquered, all you really want is more loot to make it back to the capital. This is how Rome ran its provinces, and the great eastern empires like the Ottomans and Mughals too. Local people have their own infidel customs, and while it would be nice to stamp those customs out with an iron boot, that takes a lot of effort, and they are far away, so just looting as much money is good enough. There simply were no centrally unified nations in the modern sense, until Spain, France and England in the 1500s.
As we have moved to the modern world, the State is getting better and better at micro-managing what happens in the provinces. First the rise of the European nation state lead to public education that stamped one language on the population. Then transportation improvements brought the disparate parts of nations together, and allowed representatives from the provinces to go the capital, as well as bureaucrats from the capital to go the provinces. Finally, instantaneous media like TV and internet forge a sense of a national commons. Instead of waiting days to hear about Congresses decisions in the newspaper, now you can watch what they do on CSPAN or get up to the second updates from SCOTUSBlog.
The result is, in the modern world, there is very little devolution to the provinces. Even here in America, which has a constitutionally mandated federal system, the states have only the faintest glimmer of independence from the national government. 25-50% of state budgets come straight from the feds. States can't really make their own unique laws and ways of life. District of Columbia wants to ban guns? Hammered by the Supreme Court. Charlotte wants to be gay friendly? Overruled by the state of North Carolina, which in turn is probably about to get hammered by the Supreme Court, as well.
So I argue that there aren't disadvantages or advantages. The state always exerts the maximum amount of control it can get away with given the state of technology.
Imperial Expansion (by conquest or otherwise)
While there are some laws that a new imperial power will want to apply across all territories, most regions will have complete and comprehensive legal systems already in place. As a general rule, there's no need to interfere with these systems and it will aid integration not to do so.
There's also the religious aspect, if they all have the same state religion then they probably all have very similar legal codes, which gives you even less reason to interfere.
You don't need to go in, conquer a new territory, and tell them murder and theft are bad, you only really need to tell them what their new taxes are.
There's no real downside to this, it saves a massive amount of bureaucracy and effort when expanding. In the long term it may be worth centralising but it's not strictly necessary unless something is way off your norms.
While you may have to periodically impose from above, you'd do that by sending a prefect to deal with the problems and find a local solution, rather than sitting on your golden throne a thousand miles away, with out of date information, trying to solve the problem remotely.
The short version of this is that there's actually no reason to bring a new territory under a centralised legal system unless there's a massive cultural disconnect between the legal systems, and even then you'll want to do it gently.
In the United Kingdom, byelaws are laws of local or limited application made by local councils or other bodies, using powers granted by an Act of Parliament, and so are a form of delegated legislation. Some byelaws are made by private companies or charities that exercise public or semi-public functions, such as airport operators, water companies or the National Trust.
Mostly these tend to consist of alcohol free zones and parking regulations, but the principle is there. There are many factors that apply only at a local level.
There are also local laws from earlier days that even recently hadn't yet come off the books. As an example, Both Hereford and Chester had trouble with the Welsh. So local laws apply
you can shoot a Welsh person all day on a Sunday, with a longbow in the Cathedral Close, Hereford.
There, an ancient law says Welsh people can be shot with a bow and arrow inside the city walls and after midnight.
I don't suggest using either of these as a defence in court.