Eh. That's a bit of an absolutist interpretation. I wouldn't take op's word as gospel, anon.
Firstly, Republic City was modeled after a lot of early 20th century cities. Tactless, maybe, but INTERESTING. The drive behind this decision was that they wanted to tackle conflicts surrounding industrialization, nationalism, and burgeoning democracies. Nothing in TLOK is a 1:1 reference to the real world, which is a strength or a weakness, depending on your point of view.
Second of all, the idea that Aang and Zuko "stole" Earth Kingdom lands is literally something posited by A) The Earth Queen, a royal despot that steals from her own citizens, and B) Kuvira, a dictator that wants to turn the Earth Kingdom into an ethnostate. The audience is clearly not meant to take them at face value when they say this.
Moreover, if you actually read the comics, each city/state in the United Republic VOTED to secede from both the Earth Kingdom and Fire Nation to become an independent nation. It is literally canon that it was the will of the people to break off ties with all foreign powers. That is called self-determination.
It might not be the most perfect solution, or the most perfectly just, but it's not meant to be. It's just good world building - an imperfect solution, but nevertheless one enacted by the will of the people. (You could argue that it's not certain it was the will of the people, and while that's an interesting interpretation, I think it's clear that canon intends it to be so.)
Now, there are plenty of issues within Republic City and the United Republic, but, again... that's kind of the point.
In the VERY first episode of the series, Korra says, "I thought everyone here was living it up?" And a homeless man replies, "Heh, you got a lot to learn newcomer. Welcome to Republic City."
I think that should tell you everything you need to know about Republic City's narrative purpose. But then, some people don't like nuance or conflict in their tv shows.
I hope you still want to engage with the show, anon! It's one of my favorite fictional cities to explore.
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