Presumably sectors are meant to serve as administrative districts in your empire with different behaviors later in development. They remind me more of the states added into EUIV than independent nations and seem to serve a similar purpose to them and vassals, especially if you view all society techs as both research into equipment needed to do certain things and the creation/restructuring of the bureaucracy/laws required for to actually put them into action. Once you have too many inhabited systems in your "core sector" the imperial bureaucracy starts to get bogged down and you have one of two options: expand the imperial bureaucracy (research or do something else to get more core systems) or create a lower tier government with its own bureaucratic organization to oversee new conquests/additions. The sector limit could be taken to represent exactly how many sectors your imperial bureaucracy can handle before the information becomes too much to parse, the inbound and outbound communications become too much for your communications network, and your sector governors (who would handle the sector bureaucracy) too numerous to monitor for corruption. I'm more interested in the fact that the sectors seem to only be able to represent sectors in a government that's neither democratic/republic nor authoritarian: while you appoint governors and say what you want them to do in general, authoritarian governments are forced to let the governors and sectors decide how they do it. Likewise, while sectors have a large amount of autonomy, they don't fit in with a democracy or republic since governors are appointed instead of elected.
You could also look at them as something similar to colonial nations in EUIV. You decide who runs them and they're technically part of your nation, but they have a fair degree of autonomy to do whatever they want.
You could also look at them as something similar to colonial nations in EUIV. You decide who runs them and they're technically part of your nation, but they have a fair degree of autonomy to do whatever they want.