We read in Yerushalmi- Avodah Zarah 3:1 18a (English translation by Rabbi Jacob Neusner):
[A] All images are prohibited.
[B] "Because they are worshipped once a year", the words of R. Meir [T4].
[C] And Sages say: "Prohibited is only one that has in its hand a staff, bird, or sphere".
[D] Rabban Simeon b. Gamaliel [T1 or T4] says: "Any which has anything at all in its hand".
[I.1] [A] If the idols are worshipped once a year, then how come Rabbis permit?
[B] Said R. Hiyya bar Ba: "[The reason all images are prohibited] is that in the great city of Rome they are worshiped twice in a septennate".
[C] If that is the operative reasoning, then in a locale in which they are worshiped they should be forbidden, while in a locale in which they are not worshiped they should be permitted [for Israelite commerce].
[D] Said R. Yose:"Once they are prohibited in a single locale, the prohibition applies in every locale".
[E] How shall we explain [the dispute between Meir [T4] and the sages]?
[F] [Here is the problem:] If it is a matter of certainty that [statues are] of kings [and hence made for worship], then all will have to concur that they are forbidden.
[G] If it is a matter of certainty [that the statues are] of local authorities [and hence not for worship], then all will have to concur that they are [made merely for decoration and hence] permitted.
[H] But thus we must interpret the dispute: in the case of a statue lacking all specification [as to its clear-cut purpose].
[I] R. Meir [T4] says:"When they lack all specification, they are of kings".
[J] And Rabbis maintain: "When they lack all specification, they are of local rulers".
If the translation is correct, a distinction is made here between the statues of "kings" (forbidden) and the statues of "local authorities" (lawful).
Is this interpretation correct? And what exactly is meant in this passage by the words "kings" and "local authorities"?