I rather thought the fact that the entire world in the future... was a dictatorship. It's an odd leap into the future, especially when they've advanced into machines. Also it's clear that the entire world wasn't like that since they call it a country. So what's the rest of the world doing? Did they cordon it off?

The movie reminds me a bit of Vexille in terms of crazy politics.
It's not in the future, actually. It's set in the earlier half of the 20th century. If you look at the globe that the twins have, the continents are shaped all wrong. It's an alternate world that's meant to emulate ours, but isn't exactly ours.

And the country that the dictatorship is in is an amalgamation of Germany, England and France, mostly.
Nah, it's not mentioned. You just have to be sneaky, like look at the globe or the dates on the newspapers. The Scientist's journal also has more details about the government.

...There's just so much material that Shane HAD that he came up with but just never used for the movie.