If you ask me, that city could use a bit of cleansing called self-destruction. It's not just the demon (I assume) pretending to be a city lord, it's also all of her staff, the city guard, and so forth that are bad to the bone. Otherwise Miliera obviously couldn't run a whole city. Just look at the guard's face when he talks about bringing a gift to be allowed to meet the city lord. It's the face of someone 100% dedicated to the scheme. All of those folks need to be purged for the city to return to any semblance of normality. Haru, being naiver than the dictionary entry for naive, won't be able to solve anything unless plot convenience helps him like never before.