We have a pretty robust system developing.
It allows scope for numerous character types within an ecosystem of communal storytelling, so that basically matches with the intended design goals.
It doesn't allow everyone to play everything that they could imagine, because that would dilute the focus of the game and basically water it down to an incoherent mess. Instead of this, it uses a chunky point system to channel players into preferred character types.
It allows players to gather their characters into meaningful factions with some kind of mechanical benefit for doing so.
With a definition of cultures, races and occupations, we can even combine existing systems to develop subcultures within the setting. You want a specific farming caste within the settlers, then maybe you can define this through a faction that limits itself to settlers who have held the farmer occupation at some stage in their lives. You want a group of freebooting swashbucklers who regularly interact with pirates and privateers, maybe define a faction that includes characters from both of these cultures.
We have the scope for career development, as players take their characters through a number of different narrowly defined occupations, This tends to increase the versatility of the characters through the course of play, rather than specifically increasing their power level...so new characters have a chance of confronting experienced characters successfully, but experienced characters are more desired in quests for their range of skills, and they have a wider variety of activities to engage in during the "down time" between games. There is still a progression of skills and a progression of advanced occupation types, allowing more experienced character to have an edge, but the emphasis is on rounding out characters over the course of play.
There hasn't been a post over the last couple of days, because I've been working on University assignments, and also because I've been writing up a fairly comprehensive spreadsheet of occupations, culture and races, assigning abilities to them, and trying to come up with some interesting techniques for each. I'm trying to make sure all of the abilities are shared by at least half a dozen different occupation types, and where they aren't I'm adding in a couple of occupations to cover the shortfall.
Belonging to an occupation allows a character to improve their related skills by a single level, getting to level two (intermediate) requires learning the ability from two different occupations because you gain a different perspective on the ability when you perform it in a different job. To get to level three (advanced) requires learning the ability from three different occupational perspectives. When there's half a dozen different occupations sharing the ability this allows a variety of occupational progressions on the path to ability mastery. Everyone gains an edge in specific abilities because they can learn a level from their culture or race.
I'm currently up to about 150 occupations, maybe 40 of which are allowable to starting characters.
We have a well rounded economy that makes sense, it might be a bit overly complicated and intimidating to new players, but new players don't really need to worry about that side of things to enjoy the game. The economy is in place to facilitate the construction of special items without resorting to GM fiat (which is important in a game where there may not be a centralised GM).
When it comes to a magic system, I really haven't touched on that at all. I love the magic system in Mage: the Ascension (I've stated this time and again), but it needs a good GM and is probably too open ended for LARP play. I've seen it fall apart during the previously mentioned World of Darkness live campaigns I've been a part of. Instead we have some good anchor points for a magic system in place; there are abilities for Mysticism, Ritual, Faith, Negation and Transformation, and a system of techniques which could be rewritten as "Spells" and easily slotted into the existing mechanisms of play.
In a miniatures game like Confrontation, magic spells become available to characters who possess mastery over specific schools of magical training (necromancy, enchantment, theurgy, sorcery, etc.) I'm thinking of something similar for mages in this game. Perhaps a school of magical training grants a simple pocketmod booklet filled with a range of 6 spells, of which a character starts with one (such a book might have a front cover depicting the school's name and a suitable sigil, while the back cover gives a brief description of the school's tenets, or maybe offers some kind of quest to gain experience points for new spells in the book).
Confrontation actually uses a deck of cards, with a dozen or more spells belonging to each school (packs of school spells purchased seperately), and some spells belonging to two or more schools of magic, but I'm not sure if this is the way to go. I think a cluster of related spells makes more sense, where many spells might have a more powerful effect if you possess a certain synergistic ability at an intermediate level. You might have a range of animal spells, a range of plant spells, a range of enchantments or curses, a spirit set...you get the idea. If you want to have a different set of spells available, you need to follow the right occupation (which might require a few shifts of occupation before you can open up that class).
Crafting techniques would work the same way. Smiths might be able to use metal to produce basic farm implements and tools...Swordsmiths gain a more advanced group of items such as weaponry that they can now produce...Glassblowers might be able to produce bottles, vials, glass windows, etc...Boilermakers might be good with pipes, boilers, and the necessarily componentry for building steam engines...Alchemists might stride the gap between crafting and magic, with the ability to produce an assortment of potions and elixirs. Every set of spells or crafted items is intrinsically linked to a specific occupation, and both groups might require components consumed (or a specifically built workshop environment) before their effects become manifest in the game.
The versatility of spell and crafting books is offset by the requirements necessary for these effects.