Oligarchy is a social policy in Civilization V. It is part of the Tradition tree. The formation of an Oligarchy is the beginning of feudalism, when a particular group of people native to this part of the country take the power and hold it by any means necessary. This benefits greatly local defense, since this group undertakes the obligation to pay any units from the central army stationed there, and is interested in helping it out by any means necessary. After all, they defend their interests!