Doctór Álvara Arcinega, like Giovanni Villanova, suffers from not being nearly as cool as he ought to be. One of Theah's greatest masterminds, we're told, a giant in a field that nobody knows exists (social engineering), a puppetmaster of the first order. And what's he doing? Sleeping in puddles while the Inquisition chases him around Theah. His plan to increase his personal power by using the Inquisition was intriguing, but he clearly didn't think it all the way through...
So stop, rewind, do over.
The AEG board saw some discussion of the formation of a new small nation in the border area between Castille and Vodacce. How might such a nation come into being?
The borderland in question is between Soldano and Mantua; it's a little far from Altamira to justify using that fair, cosmopolitan city as a capital for it, though, but perfectly nearby enough to justify the Arcinega family's hand in things.
I regret that I'm not "up" on Rancho Soldano or Don Soldano, but on the other side of the border there's Alcide Mondavi. You'll have dueling superlatives there - is Arcinega canny enough to pierce Mondavi's charade? I'm a Mondavi fangirl, but Arcinega is clearly supposed to be a more major villain than Mondavi. If he took the time to analyze Mondavi's actions, not his appearance, the true nature of those Eisen "refugees" would probably become clear enough to him.
Speaking of Eisen refugees, I'd assume Soldano would be the staging point for any attempt to actually take Sieger lands (per the Treaty of the Weissbergs). It's also an area which might host some real Eisen refugees fleeing from the devastation of Sieger's salted lands. Now you have to ask yourself an "IMC" question: Are these Eisen Vaticine (like Sieger was until the Church betrayed him) or Objectionist (like south Eisen allegedly is supposed to be)? Let's say they're Objectionist for the moment.
Finally, let's give Arcinega a clue about the Montaigne situation. I don't remember if, canonically, NOM is involved in the Revolution or not. But by George, for this scenario it ought to be. The entire Revolution may, in fact, have been engineered by Arcinega to further this plot. (Now there's a villainous puppeteer/mastermind!)
So simultaneously, we have a new population of Eisen Objectionists in northeastern Castille (who are probably attracting unpleasant Inquisition attention); a sudden major change in the Montaigne/Castille war which will undoubtedly occupy the attention of Don Soldano; and a Mondavi military maneuver striking out east from his lands, leaving his western border unsecured.
So you make sure the Eisen Objectionists have made allies with the Invisible College scholars and maybe even a few secret fuego mages. You find yourself a nice noble figurehead who's going to declare that they've had it with the Inquisition running amok, and that this portion of Castille/Vodacce will be off-limits to them. Maybe you've even brought down some freethinkers from Freiburg who insist on some kind of astounding separation of church and state. Everyone's too busy with bigger fish to fry to do anything right now, and by the time they get around to it, you've made some arrangements with a rich and forward-thinking person like Val Mokk. You get the money you need to hire more Eisen mercenaries to defend your new little nation, and he gets the very latest news on his Vodacce rivals, fresh from your spynest in the mountains. Isn't it convenient that there are all these Montaigne nobles looking for a Church-free place to run to? It's trivial to get the Vendel the news du jour... And for such a safe haven, more than a few would be willing to donate blood to your other research...
Now you just need to make sure that you can control the people running the place which, given that you're Álvara Arcinega, ought to be child's play (until some PCs show up, anyway). Some you'll manipulate with psychology and others you'll blackmail.
So you can answer the question "Should the leader of this new nation be a Hero or Villan?" yes and no. The guy (or gal) ostensibly running the place may be swell, and devoted to the principles of the Montaigne Revolution without the attendant bloodshed, plus hold other Enlightenment ideals your players will warm to. And who can dislike someone who stands up to the Inquisition? But there's a secret rotten core to the whole thing, and it's exsanguinating people in a super-deluxe mad scientist laboratory tucked into the side of a mountain.