[Peter Graham]

The Iron Laws laid down by one of his descendants some 100 years later are the basis of the Ishinari society and administration.

So far so good.

The monarchy is considered an enlightened one and the world is set in roughly 15th-16th century Earth equivalent time. Ability is valued highly and thus there is no strict feudal system.

Feudalism was just one of a long line of political models, so departing from it is no great shakes. Incidentally, it had died out by the 15th century. By the 16th, everyone was prancing about in tights and ruffs.

What you need to bear in mind is that feudal lords - and their Saxon/Viking predecessors - held land in return for obligation. The king had no standing army and no comprehensive nationwide infrastructure for government. Put simply, early English kings could only rule by consent. To ensure consent, the king would give chunks of land (and with it the ability to become phenomenally rich) to his mates and, in return, they'd pay him tribute, supply him with fighting men when he needed them and do their bit to keep the Danes or the Welsh out.

If lords rebelled - which they did with frightening regularity - their lands would be forfeit and given to someone else. However, kings knew that the lumpen masses didn't always take too kindly to fresh lords. The phrase "No Prince but a Percy" was commonly known and understood in medieval Northumbria and basically meant that as far as the rank and file were concerned, they couldn't give two hoots who the king was, provided a member of the Percy family was their lord. Harry Hotspur in Shakespeare's Henry IV is a Percy, incidentally. So, kings would frequently be obliged to pardon rebels or revest land in them or their heirs in exchange for fresh pledges of obedience.

Your model is not so very different from this, although I question whether the notion of a 21st century meritocracy fits with notions of kingship, at least as they existed in this part of the world. That said, for a period of time pre-Conquest, English kings were elected - or, at least, validated - by the Witan, which was effectively a council of big landowners. Upon the death of Edward the Confessor, the throne should have gone to Edgar the Aetheling, who was the grandson of Edmund Ironside who had been king before Edward. However, the Witan feared Danish and Norman claims to the throne and basically thought a goon with a big axe would be a better bet. Thus they supported the claims of the earls of Wessex and Harold Godwinsson became king. Briefly.

Question 1. - I am not sure what to call the administrative divisions in such a case.

"Shire" or "riding" (both of which derive from words meaning a portion or division) might work.

I thought of Borough

Borough comes from Old English "beorg", meaning a fortified town.

Question 2. - Does the fact that the inheritance of the traditionally feudal roles is not a given seem unreal/implausible?

For the reasons as set out above, no. But you'd need to do it carefully.

Regards,

Peter