The Midrash Rabbah on Esther 1:5 says that there are 252 provinces in the world, but Achashverosh ruled over only 127 as it says in the beginning of Megillas Esther. The Midrash explains how this came about (translation from the English translation of the Midrash Rabbah HaMevoar):
Cyrus ruled over all of them, as it says (Ezra 1:2) "God has given me all the kingdoms of the earth". Darius, the first king of the Persian Empire after the fall of Babylon, ruled over them all.
Achashverosh ruled over half of them. But if he succeeded Darius and Cyrus, why did he rule over only half of the 252 provinces? R. Huna in the name of R. Acha and the Rabbis differ. R. Huna in the name of R. Acha said that the Holy One Blessed be He said to him "You divided My kingdom when you said of Me in your proclamation (Ezra 1:3) "He is God that is in Jerusalem". (He did not say that God dwelled in Jerusalem or reigned from there, but implied that He ruled only in Jerusalem.) By your life I will divide your kingdom". (Darius had begun his reign with all the 252 provinces that he had inherited from Cyrus, but lost half of them. Achashverosh inherited the remaining half.)
The Rabbis said that Cyrus' empire was reduced by half because the Holy One Blessed be He said to him: You reduced the dimensions of the building of My temple when you said (Ezra 6:3) "Its height 60 cubits and its width 60 cubits". (Solomon's temple was 120 cubits high.) I swear that I will reduce your kingdom.
If you were to ask why Achashverosh did not receive only 126 provinces, i.e. exactly half of the original 252, it is because the Holy One Blessed be He said to Cyrus: You gave My house one aliyah of yours, by contributing from your treasury to enable the Jews to go up (make aliyah) to Yerushalayim, so too I give you an aliyah, an additional increase from my own resources. He added a province to his total. This is the significance of what is written "127 provinces".