To be an effective nation, Asgardia must be a centralized government. As it stands today, no nation has a decentralized government because it cannot survive due to a lack of unification. An example: the United States was originally set up as a confederacy instead of a republic. The Articles of Confederation gave substantial powers to the states while giving Congress almost none (there was no president under the Articles). Problems quickly arose; states wouldn't pay taxes to the federal government leaving the army underfunded, failed to allow the federal government to regulate trade among states, couldn't stop states from printing their own money, and because it was so weak they even failed to have any negotiating power when it came to foreign policy. Decentralization is a disaster waiting to happen should it be allowed to exist, and if we are to be recognized as a nation by the rest of the world, we must be united under a strong central government who can negotiate for our entire people to the rest of the global community.

Decentralized would be more practical at this stage of development. However, if you consider how the United States began, there are a number of issues with decentralized decision process - as outlined earlier by Craig Snead. If you have a limited form of decentralization, where you have an authority over all the "states" of the union that concede their decisions to the Head of Asgardia, then perhaps this method may work. Otherwise, it will be too difficult to prevent a rogue state within Asgardia from conducting business outside the nation's interests.

Overall, I believe a centralized government at the start to be more efficient in the long run. I agree with awuori044 that we can gradually shift to decentralized government as we consume more space beyond the stars.

The problem with a centralised form of government is that Asgardia, presumably, would take the form of many different facilities scattered across the solar system. For example, there may domed cities with thousands of permanent residents on Mars, the Moon, and moons of the gas giants. There may be space stations with 100 people orbiting the Earth. There may also be 6-20 person mining facilities in the astroid belt where workers periodically rotate in and out.

Meanwhile, communication is a serious problem. It takes as much as 258 minutes for light-based communication to go from the Earth to Neptune for an 8-hour round trip. Obviously real-time communication is impossible. Additionally, it is not cheap to get a clear signal that far, maybe using lasers or some other method.

My opinion is that each facility has to have a wide prerogative when it comes to making decisions, constrained only by the national constitution.