The Co-Prosperity Sphere was a First Order political system for certain non-human species galactic governments to be classed as client states to the First Order while keeping a certain degree of autonomy.
While the Frist Order was an ethnocentric xenophobic human regime, Supreme Leader Snoke planned to preserve certain non-human governments deemed worthy as long as they served the First Order and would permit some degree of independent in exchange they provide the Order with whatever they require. All loyal galactic governments would accept the First Order as peacekeepers to maintain law and order.
General Konrad Rus before the galactic war developed the concept of indirect control using total fear. Their freedom was an illusion that would kept to keep them in line by fear of a complete takeover.