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Chalk this up to an inconsistency with Stackpole, but I think this is a rather odd contradiction in New Republic attitude.

Shortly after the fall of Coruscant to the New Republic, Isard fled to Thefyra and put herself in charge as dictator/leader. Rogue Squadron wanted to chase her down but the New Republic said no because she was the legal ruler of that world. Now after Thrawn is defeated the New Republic decides to go against Krennel. They know they are acting agressive against him. Isard was a much bigger threat then Krennel ever was. What the hell is with the shift in attitude? While dispicible, Krennel ran a rather clean Hegimony of 12 planets and caused no harm outside his borders.

You're assuming polities will behave nice and obey their own beliefs.

Think of it this way: the New Republic had finally concluded their last offensive into the Core to capture Coruscant and her neighbors. After such "stretching" and looking forward to more important worlds joining up, they don't want to give the political opposition the joining on the those worlds a bone.

After Thrawn's defeat, except for the Imperial worlds, most of the galaxy is alligned with the Republic, and given the loss of faith in the NR (ref: EGtP&M) and the fact that Krennel had siezed the Hegemony by power of his fleet alone, it is not politically adventageous to show the NR isn't weak, and to make an example of some Warlords. To boot, with Krennel one has the pretext with the NR's constituients that he helped fund Thrawn.

Probaby the relative strengths of the powers involved plus the need for a good public image. And possibily a distinctive shift in the power structure.

With the Isard deal the NR had to worry about appearing as a bellicose, militant nation that wouldn't respect the rights of soveriegn planets. At that point they couldn't afford to charge off after neutral powers.

And of course the NR also couldn't really afford to fight a multi-front war with Isard and Zinji. The former had a decent strength and the latter seemed to be a positive menace.

Later on, the New Republic is established and doesn't have to impress people. They are the legitimate government rather than a rival claimant then. So they can get away with the pushing what amounted to bald faced agression. Between the PR of Thrawn and the various warlord attacks (not to mention the Emperor Reborn I believe) they were in a much better position to act agressively.

Not to mention they had the troops and ships to do it, provided it didn't bog down anyway.

It's comes down to the fact that Krennel came in and forceably took over, with a fleet of 10 or so ISD's. Iceheart was elected leader following an internal coup. It actually worked kinda like the Federation prime directive in that regard.

May I also point out that Isard was sitting atop an increably vital medical resource while Krennel had nothing but territory