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Government Structure

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Government is currently organized in levels, e.g. national, state/provincial and local. Besides cities proper, local government may also include county, township, regional municipality etc..

What (besides history) provides the distinctions and rationale behind the distinctions between the various levels or within a level (e.g. city vs county)? How should responsibility for various public benefits be assigned to the various governments in a modern society?

What (besides inertia) provides the reason for maintaining current borders between similar levels of government in a monocultural society? For instance, older (i.e. eastern) states/provinces of North America are smaller due to travel constraints at the time of their founding relative to western state/provinces. Could economies of scale (and lower tax levels) be realized by amalgamating these smaller states/provinces?

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