I think it more than likely that the Beautiful ceased being a radical faction post-Numidium due to Tiber installing them as his loyal marionettocracy.

Thalmor are more like the Sixth House. Two great clans, whose elders were enslaved by a preeminent, supramundane intellect. In Ur's case, this was Lorkhan, through contact with his Heart stone. As for Thalmor, their guiding spirit may also be Lorkhan. Perhaps through contact with his invisible Heart, itself the Spirit of Nirn. Or, Thalmor could be the name of this hypothetical entity. The clan's zero-father took that name, once he had been swayed.

Marionettocracy? Awesome term. We should install your brain into a preservation chamber so that you can exist in perpetuity.

The Thalmor seems to have been a faction within Summerset Isle (sorry, Alinor) for quite some time before the Oblivion crisis. A council-led conglomerate of ultratraditionalist houses, a la a more universally-minded Telvanni, is what I can discern from the in-game texts. That's relying on heavy inference, however, although it can be stated with reasonable certainy that they do not have a single leader. I've often wondered if they have a leader at all, or if their leader is a bit like Big Brother from 1984 in that no-one's quite sure if he exists or not. They might just be led by a ceremonial figure or idea that does not exist in reality, allowing the usually fractious Altmer mage-lords to work together under an ideological umbrella.

'You are now basking with a member of the Thalmor,' is what Ondolemar says in-game, so it seems they're a faction rather than a national denonym, and that membership of this faction is not necessarily hereditary. They look like each other, and Ondolemar does mention how he is 'superiorly-bred,' (note: 'bred' rather than 'born') so perhaps entrance is based upon racial purity?

They probably are more like Nazi Germany than people on these forums care to admit, in terms of how they took and consolidated power, and in terms of who supports them and why. The Oblivion Crisis is the November Criminals and the purges is the Night of the Long Knives. Similar parallels could be drawn between them and all totalitarian regimes, of course, so try not to read too far into that.

My suggestion is to read the PGE's section on the Aldmeris Dominion.

http://www.imperial-library.info/content/pocket-guide-empire-first-edition-aldmeri-dominion

First off, http://i142.photobucket.com/albums/r105/Enoil/ImperialFishyStick.jpg

Second, the only other sources on the subject are the novels, which don't provide much detail into their motivations and methods outside of relying on superior Intelligence, and MK's already-been-quoted-but-not-named http://www.imperial-library.info/content/dominion-prism-textract. In the latter, they appear to be trying to rewrite fate, or at least influence it. Or maybe they're enshrining their histories and philosophies into reality so that they survive annihilation. It's difficult to parse out.

Third, I like how there's a tension between the Psijics and the Thalmor that the Psijics' response to Thalmor rule is making Artaeum disappear. It's a pity that neither party explains their distaste for the other though.

I prefer vodka or Jack.

Second, I believe that one of the Psijics mentions that the Thalmor aren't comfortable with the power they (the Psijics) wield, and so the Thalmor are aggressive with them. Ancano certainly gets rather nasty and combative when Quaranir shows up. It's probably because the Thalmor can't use the subterfuge and skullduggery they used elsewhere on the magically superior and securely strict Psijics, so they tried bullying and intimidation. Naturally, the Psijics don't take kindly to the meddling of the Thalmor.

The author of Rising Threat says that:


That doesn't sound like a provisional government to me. It sounds more like they arose in the absence of government. He then goes on to say:


That is, the city-states.

They're an outside faction, perhaps descended from that provisional government, but certainly not it.

Yes, just did the College of Winterhold quests again, and Quaranir flat out tells you from his perspective that "We have power, and we will not allow the Thalmor to meddle in our affairs" or something to that effect. Ancano gets rather angry, accuses Quaranir of trying to steal the Eye of Magnus, and constantly refers to the Psijics as a "rogue group". This seems to suggest to me that the Thalmor tried to control the Psijics and were rebuffed at every turn. Rather than waste their time trying to deal with the over-ambitious Thalmor, The Psijics simply left.

I do have to wonder, though. The Psijics are obviously aware of the Thalmor's ambitions and likely are aware of their goals. Ancano's little stunt with the Eye probably revealed a great deal more to them that perhaps they were not sure of. It makes me wonder a few things:

Will the Psijics be the orchestrators of the Thalmor's downfall? Not so much destroying them outright with fireballs, but perhaps behind the scenes?

Did Ancano want the Eye's powers for the Thalmor, or did absolute power corrupt absolutely?

The Psijics generally prefer to avoid messing in politics if they can; that they interfered in the business of the Eye is extraordinary, and says that they understand the true motives of the Thalmor and consider their existence important enough to intervene.

It's not so much that they left - Artaeum isn't exactly here or there to begin with. It's pretty much wherever they want it to be.