Sorry for the slow reply.
State, yes, as another said, it means a sovereign entity (to some degree). A state can be independent, or part of a larger republic (which is what the United States are- originally a whole bunch of independent countries [sort of] who formed a republic). The EU is now almost what the USA used to be, and is also made up of states (which are countries).
In common usage, we have words like Sovereign state, Stateless alien, and as another mentioned nationstate, etc.
Try something along the lines of "State of _____", which creates a play on words; you get state, meaning country, but also circumstance.
Or you can put Sim after the other word, which breaks up the sim____ pattern of Maxis or EA.
Like: StateSim
State of Sim doesn't seem to ring very well, but maybe even something along those lines.