The D&D games I played with my family growing up was set in the Known World as described in the BECMI sets and X1, X4, X5, B10, B6, B1, and B2. Thus the Known World, or Mystara, I am familiar with is quite different than the Mystara of the gazetteers. Thyatis was a real empire and though it didn't cover all the territory shown in the Master Set, it did have power over most of the countries shown in X1. I'm not sure if we ever called it the Thyatian Empire or Empire of Thyatis, we just always said "The Empire". The imperial city was more centrally located, where Darokin is normally. The Empire didn't have any overseas holdings, unless you count ierendi and minrothad which were under indirect control. During the X4/X5 Master Conflict one of our parties met a golden dragon council and was given the task of gathering an alliance of each color of dragon and building a city as the center of this alliance. at some point all our disparate characters and parties participated in this task. Eventually we established the Dragon city and also spread franchises of the Green Ale(goblin blood) tavern.
I created a simple map showing the Territory of the empire. As I continue these interviews with my father more details about our adventures will be unveiled; I should be posting the next interview about B1 sometime this week.
About the Legend: Provinces are those areas under direct control of the Imperial government; the governors may hold different titles, such as the Grand Duke of Karameikos or the Mayor of Selenica, but they all owe allegiance directly to the emperor through family ties or other means. Client States are those countries under nominal control of the Empire; they may pay some form of taxes, but they have their own rulers and laws and armies. Militarized zones are those areas that have no imperial presence besides the army. The army provides a minimum degree of protection to caravans and maintains roads, but otherwise these areas may as well not be part of the empire. Militarized Zones also often serve as jumping off points for military campaigns.