Dubai isn't a city-state, Presentiment, unlike Vatican City or Monaco, it isn't considered to be a country.
We don't actually have any information at all about who occupies the area around Lake Alto: there is certainly human presence, as evidenced by Pirate Pete, but then there were Spirggat v Shadowling battles going in around Lake Alto area, so I'd suspect it falls more under the Shadowlands territory, than human territory.
If I were to guess where human nations are located, I'd go for the entire Ashwan derest (doubt there will be many caves in which the Shadowlings could reside), and possibly the area just to the north of the Great Forest, where the Mechanics operate (for some reason I associate that stretch of land, up to the southern borders of Lake Alto, to be quite dangerous territory, not owned by anyone, with lots of human travellers, low-lives, highway men, and mercenaries lurking about- a bit like an area around a port). Plus, the area around the Psy Academy.
I'd think that neither humans nor Shadowlings control the Great Forest, it's more of an area inhabited by Gelfs.
Given that the Psy Academy is a military institution, large enough to be considered when major wars erupt, it's possible that they have enough people to have a proper Psy-oriented army, which might be used for peace-keeping around the region, a bit like UN forces. And they could draw on Psys from local surroundings to boost their rank in times of crisis. Then Guy could be the General of that army.
I more or less agree about the Old Spriggatia, though I'd think the border would've run much more to the north of Somnus, since Somnus was the capital of Shadowling-based nation. Other than that, I think having Deeper Downs and territory to the north-west of Lake Alto as its borders seems like a reasonable guess.