There doesn't seem to be much in the way of evidence to explain which specific form of government Vendigroth maintained, unless you count old newspapers as the best in empirical evidence. I like to believe Vendigroth supported a technocratic government, scientific knowledge being a determinant of one’s place within the social hierarchy, which would number Bronwyck and Droch among its political class of technologists and thinkers, with Nikolai at its head. Be this the case, their society might have been similar to that of Metropolis and Gattaca, in which the intellectuals (valids) enjoy unlimited prestige while the workers (invalids) are prevented from advancing beyond their lower station; Vendigroth might very well have been a dystopian civilisation. It's just an opinion, I'm well aware, but I'm curious as to what other ideas everyone else here has conjured up over the years about the possible society in which they might have lived.
Honestly I'd never really thought about it; but now I have your theory is pretty much identical to what I would think on the matter. I think whatever style of government they had you can bet that it wouldn't be "nice" - just looking at the oligarchy of Tarant (the most analogous contemporary Arcanum state) and how it bullies weaker states gives a bit of flavor for what Vendigroth may have been like.
There’s also the possibility that the Vendigrothians made regular sacrifices to Velorien, a lot like the Aztecs did as a means to appease Tezcatlipoca. Sounds quite primitive, actually, for such a technologically sophisticated people. Oh, and I forgot that Tarant had an oligarchy. I thought it was a democracy for some reason. Thanks for the reminder, Jojobobo.