1. Are the provinces not the cities and regions within Cyrodill (i.e. Chorrol, cheydinhal, etc)?... because I havn't found any Imperial troops garrisoned in those cities.
Cyrodiil is one of many provinces in the Empire, you can see them all http://www.imperial-library.info/maps/n-enc-tamr-map01.gif.
Actually that map doesn't have Orsinium, the Orcish province, which is a very small and very new province in the mountains of High Rock.
2. If Ocato means somewhere else entirely by the provinces, does this mean that there was a conflict taking place recently before the events of Elder Scrolls: Oblivion?
There haven't been any outright wars but there is considerable unrest in and among the provinces. If you overhear people discussing rumors and news they'll talk about Nords (Skyrim) invading Morrowind (Dark Elves) and a few other sparks but theses situations haven't devolved in to full scale wars yet (although the Nord/Dark Elf conflict is close).