Board Thread:Speculation House/@comment-26397825-20151009002908/@comment-24994749-20151129220238

Qrow's flashback might be of a village outside of the walls of Mistral.

Back in V2, if I remember correctly, Pyrrha says they intend to go shadow a sheriff from a village outside the walls. That means there is regulated law enforcement, and that it is acknowledged as valid by the kingdom's academy.

Villages right outside of the walls might be considered part of the kingdom.

It's also possible Qrow was just romancing the visuals of the place.