Fascinating.
I've long pondered this question of citizenship myself. There are some interesting ironies for both of us. 
First off, the CDS seems to be - astonishingly - more of an aristocratic society than even Caledon! Only landed gentry appear to have a voice (through voting) and I'm presuming that only landed gentry may hold office.
It's rather remarkable that there is some question of who is a landed citizen and who is not, also, though I can rather see how the situation came about.
Furthermore - by linking land to votes there seems to be a powerful negative feedback. Anyone who develops sims quickly realises that 'longtimers' eventually buy up a sim and stay there; typically these are the wealthy who also often get busy elsewhere leaving their Second Life rather... secondary, except perhaps to pop in to attend a meeting, pay rent, vote, leave.
The new, active, participatory folk can't get land easily, and thus you end up with deathly quiet sims. Absolute control of the country seeps into the hands of quiet, wealthy landed aristocracy; the grip becoming tighter as time goes on. At least in first life, they die off and leave heirs!
It's a no-brainer what sort of slant the CDS will have over longer periods of time - it will favour close-knit groups of voting, wealthy residents and their needs, over say, national needs.
The mechanism isn't terribly relevant. It may be representative democracy, it may be Because-I-said-so-ocracy, but the demographic trend is clear unless you actively fight to quash it.
Is a wealthy, quiet, residential nation a bad thing? That depends upon what the soul of your nation seeks to be.
Caledon has this issue too, but does not pretend to be so democratic; also, our expansion has tempered this a bit. Our older sims tend to revitalise when new sims open, thus the wealthy move to larger estates in the new, and small land parcels open up in the old, bringing in fresh new participatory residents.
* * * * *
Ironically on my side of the fence: Anyone can know *exactly* who holds citizenship rights and who doesn't at any moment - simply look at the main group. But what does citizenship *mean*?
- Should there be a grid emergency, Caledon may limit access to citizens only for a period of some hours (ostensibly to defend from grid attacks). Most notably, all people in the group can be reached by group IM; i.e. - "Alert, grid attack in progress, do NOT rez any suspicious objects!" &c &c. This has yet to occur, though we have been close to it a few times.
- Discussion of national issues is common on the group channel. While there is neither voting (nor Robert's Rules!) it usually doesn't take a political analyst to know which way public sentiment is going. Far from perfect, but not unhelpful.
- Land still counts. Caledon's tier is approximately 2500 USD per month at the moment, so you better believe that if either the top 10 landed folk (controlling over 1/3 of Caledon!) or say, the smallest 100 landed (controlling a substantial chunk of the rest!) have an issue, it will be addressed as promptly as possible in either case. Even people with no land have some voice - without your regular visitors you are greatly lessened as a nation.
It's almost a House of Lords / House of Commons situation - if proposed changes don't "pass" the approval of both general groups they generally don't happen. Rarely are formal votes needed when people tell you what they think freely and often. Though I have seen a rare few sticky issues wherein a very basic form of representative democracy would simplify things.
The new 'voice' feature may be one of those tricky issues worthy of democratic resolution - strong feelings on both sides of the issue, though the anti-voice side is the more *cough* "vocal" about it and the pro-voice side seems to be a lot more secretive about it, telling me quietly. It's a great challenge but one that may be moot depending upon the fees involved.
So far, alts aren't an issue - it simply doesn't matter if someone is two avatars at once. If they are, they are merely stuck dealing with the advantages/disadvantages of being both.
* * * * *
So... back to the tough issue facing the CDS.
What constitutes stake, and therefore citizenship, in the CDS system? Land, certainly... but what of say, a creditor that has loaned the CDS a significant amount of $L? Should they not have a say, if not a substantial say? What of someone who makes the community desirable?
Here is a daring response to the '100 friends or alts' problem. If those 100 friends are truly participatory and paying, why would they [i:mv84m33q]not [/i:mv84m33q]deserve democratic control? Sure, protect yourself from attack, I agree - but what if it's not an attack, but honest participation?
As for 100 alts - how about this: Ensure that the cost of 100 alts buying up land and paying tier for X months before gaining full citizenship, far exceeds the benefit they would gain by taking over and selling off the sims.
The question is really this: Are the current members of the CDS willing to cede control to the people who will inhabit your next 5 sims? For they will outnumber you greatly, be they friends first, alts, or just honest-to-goodness humans.
