Angus,
I couldn't decide if you agreed with me or not.
It is very realistic for one man to control millions - through a chain of command;however, the friction of command means that individuals in the chain of command will be more or less competent than the commander, show more or less initiative than the commander, etc.
Navigating the screens of different countries in your empire simulates this friction pretty well.
On a side note, look at the level of control that countries achieved during WWII - the last war controlled with paper, pencil, and filing cabinets. FUBAR and SNAFU haven't left the vocabulary with the advent of computers.
Adam