Technical notes: Question, why have Jedi supposedly joined your 'Blue Army'? It suggests perhaps their cause might be just, yet you end the chapter with the Jedi Council sending a 'hit Jedi' to assist.
Not all Jedi have gone with the << blue army >>. Half of them have gone and the other half stay with the republic.
The entire galaxy is divided because there are 2 opinions:
1) Some poor men fight against the rich corrupt politicians, in order to get their freedom.
2) Some peasants did a revolution and they now want to kill, rape, steal and destroy democracy.
So here there is no Just cause. There are just different opinions..
Also in the next update the << blue army >> will be destroyed. That << blue army >> story was just the prologue for the real story.
Also thank you for the feedback.
EDIT: The jedi who have joined the << blue army >> are rebels against the authority of the jedi council, so the jedi council wants to eliminate them.
The mutiny of what sounds like one division of troops was ill-timed, and would be a reason to be worried, but not for the amount of panic shown. A division (10-17,000 men) would be rolled over easily by because you only need to detach about 60 to 80,000 troops to do so.
You are right. But they were panicked because this division cut them from their supplies, and even a very good trained army without supplies and firepower can be easily destroyed by 2,000,000 men with wooden swords.