Type 3 is enough for legionaries. Gallic and hispanic auxiliary cavalry need lvl 2 (something I don't really understand).
Except for some regions (with very good regional troops) I prefer to build the lowest gov type to fully develop the city and gain the highest amount of money from it, but that's only for non-roleplaying. Most cost-effective regionals don't need more then a lvl 3 MIC and thats available with lvl 2 gov for most factions.
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