Swiss cantons are a lot smaller than even Rhode Island (by area) or Wyoming (by population). From memory Switzerland has 5 million people and 32 cantons. Municipalities are also free to secede and form their own canton or join a neighbouring canton. Referenda aren't just a national thing either, they have them at every level of government. This all probably contributes to how well it works, that and the extremely strong political culture of consensus, and the way the federal government is organised. The Premiers of each canton sitting in forum are the Swiss federal government, and all decisions are made unanimously. It's a very conservative system.

The only country I've ever visited that gave the same impression of having the same level of organisation and competence as Switzerland was Singapore.