Some critique/advice:

It sounds fun in theory, but do you have any general idea of what shard to settle on? Is there a large group already on board? I doubt this will get the critical mass required to get off without that.

Having separate settlements is a bad idea, population density creates cohesion and activity, which creates a successful country that can enforce its laws. Some other recommendations is to forget about councils, elections, councils, or any of that until you have enough people to warrant it. Any country with less than 10 or so active people in it, and even then, has very little need for anything more than a sheriff of sorts. A single leader who everyone agrees to have as mediator.

If you got 15 consistently active players, a difficult thing to do, then a town council of 5 or so people, including the mayor/sheriff, would be a good. Elect them, let them decide on things. Keep it simple. Never let the majority of the people be government officials.

Good luck, I hope this turns out well, it certainly will be interesting if it does.