In political science terms, what your describing is technically a "confederation" (similar to the United States under their first constitution...the articles of confederation). A central organization existed, but cooperation among the independently sovereign states was completely voluntary. It obviously turned out to be a pathetic failure and was replaced by the Federal system employed today (whereby the central government and states maintain their own spheres of sovereignty but in those instances where there is a clash, the central government prevails).

In any event...both "confederation" and "federation" do sound very modern...but the failures of the american confederated system during war time might prove to be interesting fodder for story ideas....i.e. perhaps part of the reason why your mage faction is unable to successfully defend themselves against the drow is because the organization provides too much autonomy and deference to its local units. (as was the case with the US early on). Local units acting in their own self-interest may be unwilling to make the kinds of sacrifices for the collective good that are necessary.