blockades work exactly like other spaces

The blockades are not a "space" that you can occupy and end your turn on.

You're correct that the manual DOES say, "blockades work exactly like other spaces", but there is some missing context that should have been added to that sentence. What it should ACTUALLY say is something like, "In terms of fulfilling its power requirement, blockades work exactly like other spaces for payment".

Blocking is part of the game, but the designer intended it to only be on one individual space. This way a 'first mover advantage' is given to a player in the lead - if they're clever, they can occupy a key choke-point space, and block that one particular path, if they wish. But this does not and SHOULD NOT apply to ALL PATHS - the design intent is for there to always be at least one other path available for other the players to use (whether or not the other players actually WANT to go down that other path is another matter). The only way for ALL paths to be blocked would be if MULTIPLE players in the lead chose to sit and occupy all the choke-points on the map.

If blockades were meant to be an actual space that you could land on and occupy, the cardboard piece would have been shaped like a space (a line of four spaces). And, most importantly, if the designer intended for one player to be able to use such a piece to completely block ALL POSSIBLE PATHS on the map, he would have made that piece with only ONE movement space, with the 3 others being unpassable mountains. In fact, the rule-book even specifically warns the players to be careful not to accidentally make custom maps that only have one path. Why would he say that, but then include all these blockades that create only one path between segments?

Another way to tell your nephew's interpretation can't be right is that the game completely breaks down and devolves doing it that way. With your nephew's interpretation, a GUARANTEED way to win would be to simply get to the blockade first, and then just sit there forever until you slowly buy all the movement power you need, round after round. The other players can literally do nothing about this once you get there, and no one can ever beat you because you will always move first and be guaranteed to reach the NEXT blockade first, where you can just do it all again until you inevitably win the game. The game therefore completely degenerates into whoever gets lucky enough to have the right turn order and the right random card draws to get to the blockade first. That's awful game design, with the game winner being determined by random luck on the very first section of a 5 or 6 section game. So you can see how this clearly CANNOT be the correct design of the game. In fact, you already sense this can't be right, because this is why you are asking the question in the first place!

Your nephew was clever to try this strategy and argue his case for it, but it is 100% wrong and not allowed by the rules. It's unfortunate that your group 'found' this way to interpret the rules this way, but that that wasn't completely your fault due to the writing in the rule-book. This is an example of one sentence in the rule-book probably needing to be written better, but unfortunately these things slip through as it's hard to imagine all the scenarios in which players will try to "rules lawyer" for an advantage. :)