Neo Arcadia is a massive city-state originally from one of the Rockman Zero continuities. At the time of Unification, the city was lead by the dictator Dr. Weil, who had clawed his way to power during the Elf Wars. It survived for decades as a neutral territory, in part due to its rather remote location and proximity to the Skaro Wasteland, plus general lack of strategic value to the Union and Confederacy. Its unwavering and harshly oppressive policies regarding reploids was used as justification for its "liberation" by the Confederacy in late AU13, and it is now a Special Administrative District of that faction.
The most significant change since the takeover regards the laws regarding reploids and other electronic life forms: equality for all sentients has now been enshrined in law and strictly enforced. The military presence, while still heavy, has lessened somewhat in the past few months. The Confederacy maintains a garrison there, but law enforcement is maintained by local civilian forces. The government is run by a council, at least on paper; Brigadier General Taro is the de facto ruler, though his official title is simply Military Liaison to the Council. SHODAN is also influential in local affairs, if more covertly. The two of them maintain a secret research complex in the desert a short distance from the city walls.
The city itself is technologically advanced, capable of producing some of the most sophisticated robotics, weapons, and holographic transmitters to be found in the multiverse. Magic is virtually unknown and not generally part of the cultural landscape; spell components and devices must be imported or found from one of the few immigrant practitioners.