it only works in an imaginary world without interracial/international marriage/families

You can go back to the 18th century and see it in practice. Also in apartheid systems like the South African junta and the Hinduvista/Tibetan caste systems. The method works so long as the families at the top of the food chain can exert sufficient control downstream, typically via a mix of funding/staffing large occupying armies and pitting native peoples against one another to the benefit of the foreign ruler.

If you get into the history of the French and Indian War, for instance, you had the English and French colonialists backing various American native tribes in what was effectively a coast-wide war. Similarly, Cortez and Pizarro defeated the Aztec and Inca empires respectively in large part by turning insurgent factions within the empire against the chief monarchs and supporting their insurrection with superior European firepower. The end state of the fail of the local empires was foreign governors playing “Kingmaker” among the native peoples. Then they carved out larger and larger settlements for their own migrant populations, while stoking fear of the natives to encourage loyalty to the foreign crowns.

The real world is not made up of distinct races.

It’s made up of distinct languages and cultures, as well as distinct understood identities and accepted hierarchies. The strategy of Divide and Conquer is an ancient and devastatingly effective one. Our post-WW2 neoliberal turn happened as a necessary rebuttal to Internationalist Communism (which was, itself, fumbled early on via the Soviet-Sino split). But it only needed to persist until the threat of Soviet Era support for anti-colonialist native coalitions faded.

Without a Stalin or Khrushchev or even a Castro or Tito willing to put a thousand guys with guns on a boat and send them to support a Marxist revolt in Columbia or Angola or Vietnam or Afghanistan, there’s no need to pretend we need a Big NATO Tent. No more need for the EU. No more need for economic alliances in the Pacific Rim. Now its every Colonial Empire for themselves. We can go back to merchantilism and juicing our satraps like a bunch of ripe oranges.