The government was an absolute monarchy and King Koopa can declare anything
The major economy was joining the Koopa Pack. In fact random Koopas and Goombas are drafted to join. 75% of the males were in the army. The only other job was being a servant of King Koopa.
They got their food and products from U.C just like DarkLand
Up until Super Mario RPG the quest of koopa they were allies and the armies worked together often mainly because King Koopa is cousins with King Bowser.
Due to treating the Koopas and Goombas badly they team up with Dark Land 1 to fight against the Mushroom Kingdom
The End of Dark Land 2
After King Koopa was defeated by Mario and Rosalina in Super Mario Arpg the Quest of Koopa and died, Bowser assumed control of the land and it became part of Dark Land. However Ludwig von Koopa said he should be the rightful king of Dark Land 2 since he's the eldest son of King Koopa and now there is a koopa family conflict.