The first thing that came to mind when I read the first post was The A-Team. Not a perfect fit, but it could work.
As for the lopsided agreement, it sounds a lot like those in charge on the side of the humans/dwarves/etc have made the deal work for them, but not their peoples. They're living high off the hog, while attacks continue. The monsters who are caught in the act end up getting fined, though it is really more of a tax on their activities, while those who stand up to the monsters are banished/imprisoned before their defiance can inspire others to action.
Absolutely. Which helps hide the puppet master even further. The leaders simply don't care as long as their sovereignty is flourishing and they have enough muscle to keep their people in line.