I think the leader (no matter if his game country is a dictatorship or democracy) should consult with his human field marshals to see what the overall picture is on the ground and what should the leader order the game to produce. It could be like their own war council where every members talks it over. More points of view are needed to have a better understanding of what is going on. If they want to they can AAR it or roleplay their parts. I don't think human leaders should just produce whatever the heck they feel like producing because it could lead to flawed decisions and take his country to ruin.
I think though, that the position of any leader in the MP Roleplay should be one of Primus inter Pares or First among Equals. That is, someone who holds an equal power to the rest but have a higher standing in the hierarchy (in this case because they are the Head of State). Think of it like King of Kings.
Or at least, if a leader has these autocratic powers of decisions and he is taking the country in a wrong and ruinous direction during war, there should be a house rule that if 80% percent of the other members vote to oust him in a coup d'etat, he should resign or at least take a lesser position in the hierarchy.
Okay, let me talk a bit more about the leader system:
Basically what the leader can and can not depends on the country. For democracys, the leader basically gives the direction, however (because its a democracy) can be outvoted by his ministers and generals. Generals can disobey him also, - if they do, they only get demoted if the majority of that countrys players aggrees to, and can be pardoned his disobedience if the majority of players does so. Also, democracys elect a new supreme leader all 4 years. The leader however can promote people, to lets say minister of economy, or generals - and can change the positions of the other players in his team like he wants to - and only needs approval by the majority if he "punishes" a player, by demoting him to something insignificant (for a limited amount of time), for instance: General XYZ disobeyed, - then he can take that guy from his army, leaving him with nothing but a small corps for an hour or so (making him insignifcant, he needs 60% of his fellow members to aggree though) - if its however a simple change of position (like giving general A command over Army XI and taking away command of army X, or taking all army from him in return to giving him the authority over production, he can do that.)
Now lets take a look at dictorships: Basically in a dictatorship like Germany, Italy or Japan (by game start) or another dictatorship, the leader does never need approval for anything and can basically even kick people out of his team (of course this should not happen! - only if someone really does nonsense on purpose).
That doesnt mean that the Dictator is "invulnerable" - if generals want to rebell versus their respective leader, they can do so, however if they do, it will be done with a game modification, that makes the "rebelling" generals army belonging to a "rebell faction", - the general then can try to beat the government by taking the capital (and becoming the new leader), or use his army to do whatever the hell he wants (like fighting alongside the enemys or use it to conquer ethipia and operate from it.. or anything you can come up with) - however the revolting general wont take his whole army to rebellion, but only a percentage which will be calculated by the ingame support for the government as well as some dice rolling. However it will be possible to overthrow the government, just very hard.
Rebellion/trying a rebellion will be the only way how you will be able to oppose a dictator. If a dictator says to player X he gets discharged of all command for 30 minutes (i guess we will set a limit at around 30 minutes for complete discharge, so people dont get kicked out), all he can do is accept or try to revolt. Same if the general/person gets "demoted" to commanding 30k troops instead of, lets say previous 1 million.
So what does this mean? Does the generals simply obey? - Well no, at least thats not how i will handle it in germany (how you guys handle it in italy/japan i cant influence).
For the German Faction however, the leader (me) will mainly function as the "role play head", making sure that A: There is roleplay going on, B: Providing Roleplay opportunitys for every player of the country.
What does that mean? Well, instead of "playing" myself, and handling economy, trade, war, e.g myself to some extend, i will instead appoint people out of my countries group to various positions and then tell them what to do. Afterwards i will make sure, that they dont get bored (since the game will progress in speed 1), basically with giving them side orders, like for instance filing me a report on the front (which i would want the generals to actually work on, whenever they are bored or got freetime), or for instance telling my generals to prepare war plans for hypothetical wars with our neighbours or threats, and have them present those plans to me, to then either aggree to them, disaggree to them, or to yell the *** out of them.
Also, i will have them report on me, and give them orders and plans of my own, which they will either execute, or try to argue with me about, convincing me that they have a better plan. I wont move the armys myself though.
The same for economy: I might appoint someone to minister of economy, who then will also receive orders by me, like to ensure that we get XX ressouces, to trade XXX, to make sure that Z, and so on. He then has to try accomplish what i told him to, report, and give me estimates on what is possible and how long things will take.
Meanwhile, i will watch everyone do their job, read reports (if there are any), and write on a kind of victoria 2 heart of darkness style newspaper, that i will try to finish to the end of each ingame year.. if i get the time.
And maybe, just maybe, along those lines i will get arrested by the police after the neighbours reported me of beeing too loud yelling at my generals.