I'd like to present another idea here for some scrutiny, if that's okay. This is an idea for the basic background of the prequels and for the antagonistic army of the prequels:

Many years have passed since the Mandalorian War brought chaos to the Galactic Republic. Surviving only barely thanks to the efforts of the Jedi Knights, the Galactic Republic has now entered a dark period in its history.

Insisting that the Republic is ill-suited to handle these conflicts, a separatist movement has emerged united under a common philosophy of militarism and authoritarianism. Led by former Republic General, Wilhuff Tarkin (an ingenious tactician and military strategist), the Republic was at first forced to ignore the ever widening scope of the newly formed "Galactic Federation".

The Republic finally entered into conflict with the Galactic Federation when, under the pretense of "offering military protection to unprotected planets", the Federation invaded and occupied several defenceless worlds - including Alderaan - with an army of Clones.

The prequel series concludes with what had been the scheme of the Emperor all along - the merging of the Republic with the occupied Federation worlds, to form the Galactic Empire. The source of the Madalorian conflict is "identified" as having been the work of the Jedi, and they are outlawed. The re-unification of the Republic and the Federation is hailed as the way toward stability in the galaxy, with Palpatine publicly welcoming Tarkin back into the fold and offering many of the former Federation leaders positions in the new order.

Visually, the Federation army would have a lot in common with the Galactic Empire of the original trilogy. In a way, it is the Empire's ideas that are being fought from day one, until gradually the Republic comes to share those ideas and, once the Jedi have been scape-goated, transforms into the Empire.