[zamadatix]

Both are just as real interpretations. If a gang were to run a city it doesn't mean they start issuing passports that do anything or get to apply to vote on things in the UN. Just because you don't recognize the neighboring group doesn't mean they can't wage war against you or take control of what happens in the region.

For most contexts I'd agree being recognized by other countries is the most common interpretation between the two angles. That doesn't mean it's the only valid interpretation.