A mixture of both is the usual approach I think.

A central government delegating most of the day to day management of citizen's environment to local, highly autonomous entities is a common pattern.

Central allows the majority to rule the minority. Distributed allows the majority to rule the minority but also allows groups to move to a jurisdiction where they can be the majority, or at least have a more friendly government while central does not.

Central is certainly easier for the rulers though and they have much more power and resources.

Federalism!

Depends which tradeoffs you are comfortable with and which aspects affect one's individual definition of "better".