I'm still skecthing mine out, but essentially it goes something like this.

In Episode 1, we see Palpatine behind a manufactured crisis, much like in the official canon. Only in my case it's a coup d'etat on Alderaan, which draws Bail Organa in and creates a scandal between isolationists and federalists in the Republic Senate. Palpatine can use this to get elected chancellor.

In Episode 2, the isolationists turn into the Separatists and attack the Republic, starting the Clone War (though it's not known by that name at the time). The Republic is under heavy assault, and has an outdated military organization. Bail Organa redesigns the organizational structure, replacing the old fractured one with something more centralized. As a result, the Republic lives to fight another day, and Palpatine can use the success to win a second term.

In Episode 3, the war has dragged on, scarring the Republic. Important resources are being rationed and there is increased xenophobia and suspicion, seeing as the Separatists and mostly non-humans. Martial law is instituted and the Chancellors office gets transformed into the office of the Emperor.

And that's the real conundrum for me. Why would he choose that name for the new offiice? As mentioned, the name "Empire" probably comes across as something negative. The administration will want people to think of the name as something positive. So, there must be something that makes Palpatine suggest changing the name from Chancellor to Emperor as a symbol of the good things to come. Not sure what that is yet.

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Obi-Wan says he hasn't gone by the name of "Obi-Wan" since "oh, before you were born."