I canât really address the game-design rationale for how these cities are handled (Krieghund might be in a better position to do so), but from a real-world perspective the seven cities marked with red squares correspond to the real-world capitals of seven of the gameâs nine player powers:
Washington (United States)
London (United Kingdom)
Moscow (Soviet Union)
Paris (France)
Berlin (Germany)
Tokyo (Japan)
Rome (Italy)
The two player powers which are excluded from the red-square club are China and ANZAC. In the case of China, the rulebookâs China Rules treat China as having no capital. The reasons given (âChina is not an industrialized nation and has a rural economy and decentralized government; as a result, China does not have a capital like other powers do.â) are arguable. While itâs true that China at the time had a rural economy and was not industrialized, that in itself has no bearing on whether a nation has a capital or not; if that were true, you could argue that ancient Rome and, for that matter, every pre-industrial state in history (including the US in the 18th century) lacked a capital. The part about China having a âdecentralized governmentâ is a more solid argument, but it oversimplifies the situation. The Republic of China did in fact have a capital, Nanking, from 1927 to 1937, but China wasnât entirely unified at the time; following the Japanese invasion in 1937, and the establishment of a collaborationist government in Nanking, the Nationalists set up a wartime capital in Chunking (which on the Pacific 1940 map very roughly corresponds to the black dot at the northern end of the Burma Road).
I donât think the rulebook gives any rationale for ANZACâs exclusion from the red-square club, but this actually makes sense because âANZACâ is strictly speaking a two-country military entity, not a nation or a multi-national political entity like the European Union, and thus it doesnât have a national capital.