As far as governments go, I think Civ3 did a pretty good job of staying true to history.
In general, the less personal freedom a government allows, the more of a problem corruption and waste will be. When people know they have more choice in how they live and how they are governed, they're less likely to try to exploit the system. And in capitalist govts like democracy and republic, efficiency is stressed, so less waste occurs.
For example, the USA, which in game terms is a republic, experiences much less corruption than the former communist USSR. One of the things I like about Civ3 is the fact that corruption is much more of a problem in communism than it was in Civ2. During the cold war, all consumer goods were distributed by the government, and it was much easier for those in power to use the system for their own personal gain, so the majority of the people had to deal with the corruption of others. This led to huge food shortages, and the Soviet Union eventually had to start buying food from the US.
Civ3 also did well with war weariness in governments. When Monarchy was the most common form of government, wars were just grudge matches between the blue-bloods in power. Armies were the private toys of kings, made up mostly of criminals and other "scum of the earth" as Wellington put it. The common folk had little reason to care about their ruler's wars, unless it meant increaed taxes. Only later, during the French and American revolutions, did war become really important in the lives of the people. Representative govts also allow greater freedom of the press, letting the people judge for themselves whether or not they approve of the conflict.
Sorry didn't mean to ramble. Hope I didn't bore anyone.

It just happens when i'm writing about something that interests me.
Vive l'empereur!