Malbim: When he saw that Daniel did not accept divinity, he gave to him authority, great gifts, jurisdiction over all of Medinas Bavel, and made him the head of all Chachmei Bavel.
If the capitol includes the region under its rule, his question (refer to 2:48:2:1) returns! If it does not, did Achashverosh's reign over 127 cities encompass the world? In Ever ha'Yarden alone were "Shishim Ir? Levad me'Arei ha'Perizi Harbe Me'od"!