Regarding how Xia took over the world.

Xia took over the world, so the world is now one singular country, Xia.

It is then divided into Regions, which are like cities, but on a larger scale. Regions are determined by the old countries. For example, Yel lives in the Xin Hunaland Region and the Aokulan city. But his country is Xia.

Each Region still have a capital city, but the Earth only have one capital region, Xia.

As for foreigners, people from different regions still refer to each other as foreigners, although they are now ethnically the same people and speak the same languages.

Hope this helped :)