At the end of season 1 of Korra, the equalist movement is discredited, shown to be nothing but a front for bloodbending and personal ambition.
At the beginning of season 2, the government of Republic City has been replaced by an equalist one. What happened?
First, how did Republic City ever get into this mess?
The comics suggest the original government was a three-person council. One representative of the Fire Nation colonists, one of the Earth Kingdom natives, and one of the people who don't fit neatly into either category. The last were a very small group, but a useful tie-break and had the strongest tie to Republic City itself.
As the city grew and attracted Water Tribespeople, the council added Water and Air representatives. Even though the Air nomads consisted of one family and a handful of acolytes.
Fifty years later, this system was creaking. A lot.
For one thing, intermarriage became common, and after two generations of it almost the only people with clear nationalities were benders. The "unaffiliated" category had grown from a small tie-breaking community to 90% of the city. All of whose voices were collectively weighed as equal to Tenzin's.
Worse, the idea of Earth and Fire as the natural political poles had become obsolete. The Hundred Years' War was starting to look like ancient history, and the real conflict became old money vs new money vs the poor. Benders, of any element, tended to be old money. So the Earth, Fire and Water representatives voted as something of a block. (Tenzin, who didn't need to worry about re-election, voted his conscience, for what that was worth.)
Still, so long as Aang was alive, he could usually prevent any really horrible policy by his personal prestige and charisma.
Then he succumbed to old age, and for the next sixteen years things got worse.
Then season one happened.
Up next the equalist movement had run out of both tactical options and effective leadership, while the powers in the city had run out of sympathy. The only one left to break the logjam is Aang, with whom Korra has finally made contact. He warns her the city is dangerously out of balance, and apologizes for leaving it to her to clean up.
Korra's first task is to learn how to listen. She had thought that with Air her training was complete. In fact, there was much left for her to learn.
At a terrible cost to her popularity, she proposes a new, equalist constitution. She needs a majority vote of the existing council to pass it. She has one out of five: Councilman Rico of the Unaffliated supports it, possibly because he expects to become President.
After various discussions, the Fire representative invites Korra into her office, and shows her grandfather's shrine of repentance. It contains three images, and a few scraps of cloth.
On the left is a picture of Firelord Sozin, and a quote: "The people of the Earth Kingdom want our gifts. The kings refuse them for fear that a richer, stronger people will be a freer one. So it becomes our duty to end their tyranny altogether." The Councilwoman explains that she doesn't know if Sozin truly believed this, but her grandfather did.
On the right is a famous painting of the sack of Ba Sing Sae.
And in the middle is a map, showing which parts of the Earth Kingdom her grandfather was to incinerate on the day of The Comet.
The bits of cloth are what remain of a towel that her grandfather used to dry his tears whenever he thought of what he had done.
He had given it to her shortly after her election, knowing his own death was near, and saying that he was beyond redemption, but if she could learn from his mistakes, the family might be redeemed. And this is why the Councilwoman refuses to support radical change. No matter how wise it sounds, she is afraid she's following in her grandfather's footsteps.
Korra answers her with a central lesson of Earthbending: standing still is also an action. This doesn't resolve the Councilwoman's dilemma, but it does show her current resolution doesn't work. Eventually, she comes around.
The final vote needed is Tenzin's. He recognizes the city has fallen out of balance, but he refuses to give up the protection that his office affords the Air Nomads. In particular, the temple runs on government funds.
Asami rallies a group of rich industrialists to fund the temple, part as charity and part by paying to have aeronautical engineers trained there (history suggests that's useful).
But Tenzin still fears that a majoritarian government would stomp all over his small ethnic minority.
Korra appeals to Aang for help, but he refuses. *She* is the living guardian of the balance. *He* is dead, and pushed Tenzin around too much back when he was alive. It's on her.
Which leads Korra to her greatest challenge as she struggles to come of age as an avatar. *She* must *teach Tenzin* how to be the leaf in the realm of politics.