Are the Azzies back in their old sector, or have they 'revitalized' the old Ute sector as 'their' sector?
No, they're in the old Ute sector, since getting their sector back would have meant dealing with the CAS, and there's no way the CAS would deal with them.
I agree.
But no one, meaning the UCAS and CAS and whoever else in the area had to allow it.
I believe The UCAS and the CAS had interviened to stop such hostile actions in the past. This time it was hands off. Nationalism in a sense.....
Remember, though, that the other four powers (UCAS, CAS, PCC, and Sioux) had all worked out a new Treaty that would have brought the Azzies back in anyway, while Ghostwalker was 'out of town'. Then Ghostwalker shows up, tells them to stop being idiots, and basically pisses them all off. The concealment from the storm and such that the high level spirits the Azzies brought in to guard their aircraft when they moved makes a nicely plausible excuse for why they 'didn't see anything'. And once it was a fait accompli, trying to drive the Azzies out of Denver without the weight of a treaty behind them would mean all out war, since the Treaty had expired by then.
What's this from? Or is it speculation on your part?
Couple things. Check the fiction in Clutch of Dragons, where Harlequin waltzes into the office of Domingo Chavez (one of the members of the Azzie board), makes himself at home, knocks out all the elite Azzie troops sent to remove him with a single spell, tells Chavez's secretary he would like to schedule a meeting for now. Then he waits reading a newspaper with his feet on Chavez's desk until he gets there, and says he heard the Azzies have a 'dragon problem' (Sirrurg), and it just so happens that he did too (Ghostwalker).
Also, in Storm Front, in the Triumph of Aztlan chapter, Winterhawk implies that it was Harlequin who gave the Azzies their final push into creating Blue-227.