Night City isn't a city state. It belongs to Southern California, which is an autonomous state that (quite loosely) belongs to the NUSA. That's why NC citizens sometimes serve in the NUSA military and come back to become 6th street. In a radio broadcast you can hear the info that according to polls 78% of NC residents are in favor of returning fully to the NUSA.
As for the NCPD not controlling their borders, it could be explain by them being as several times stated in the game, critically understaffed and underfunded.
What I deduced from that is that you're smuggling with a LOA, which sounds to me that the border crossing is perceived as 'preventing from getting out of the country'In the Nomad lifepath, when crossing the border to Night City, I noticed that it's SoCAL authorities that let you through.
That would be like me as a Canadian wanting to cross into the U.S. but having to deal with Canadian Border services instead of U.S. border services.
I'm pretty positive that Nightcity was a ''neutral power'' during the war and picked no part or side.Night city and northen california was on the free state's side of the war. I mean, I can envision NUSA patriotes leaving Night city and voluntering in NUSA army but it seems there are a lot of them, even more than regular guys who would go in NorthCal army.