If one royal persons officially makes all the decisions in a nation, that government is called a(n)

A Monarchy or a Dictatorship.

Explanation:

A Monarch(Depending on the type of Monarchy) may make the rules, however, the people make question it civilly, and in certain cases it make have to be passed through said nations legislative branch. However, with a Dictatorship, anything the ruler says goes. No one gets a say in otherwise, or they in most cases will be silenced quickly and forcefully. However, to answer your question, it's most likely a Monarchy, due to the questions basis.

answer; by working independently, the states have a high likelihood of developing innovative solutions that can be employed in other states;

answer; /// the need to make choices because economic wants exceed economic means;