Ya, when the manager is comfortable dictating and the staff is comfortable being dictated (use whatever term you like), you have a far simpler and efficient work environment. If you can relax and just trust your boss, then you can also trust that you have it easier, especially if they're good at their job. They might be having to deal with someone that just treats them like overhead, who was most likely not hired by them.
Good managers are also good with their boss, and likely a big part of how they were promoted to manager in the first place.
You can outrank people to whom your technical skills are inferior (or nonexistent). It depends entirely on the organization and its culture (is there some MBA glass ceiling? is there twin-track?) Most places aren't meritocracies, including the ones that claim to be. Conversely, technical skills may not matter above some ceiling. Again, depends entirely on the culture the organization chooses.
Yes, superior rank and superior skill are completely separate. There is zero need to confuse the two.
In a meritocracy, you may expect the superior rank to be given to those with superior skill, but the skill isn't what gives them the power once they have the rank, and it's the skill to get the rank that gets the rank, not the skill of your job.
Good managers are also good with their boss, and likely a big part of how they were promoted to manager in the first place.