I've always considered that the Pokemon World's Government is an unseen Democracy and that the Elite 4 acts as a Figurehead, similar to the Queen of England or Zapp Beeblebrox(HGTTG reference FTW). They don't have any real power, but did at one point and now people sort of "Honor" them. Clair, Lance, and Wallace are really all descendants of Royalty, but it really isn't official. I'm guessing it will be an amalgamation of the Japanese and American Government systems. So there will be an Executive, Legislative, and Judicial branches as well as an electoral process and representatives. We just never see them.
I have always liked the idea of the Elite 4 like that.
That's my opinion. Many people don't take into consideration that these "Towns" aren't really towns, but representations of towns. Towns are much MUCH bigger in real life, and the towns we see in-game are simply smaller versions/models of them. So there is probably a Court and a Voting Office in every town, we just don't see them because the Towns in the games have been iconically small.