If you read a few of the threads in the international section of bigfooty.com you'll hear answers to both.
There's a lot of politicking going on. The IAFC is run by a guy called Brian Clarke, who's not particularly well-liked by the AFL these days.
Basically, the AFL are control freaks - and as such are insistant on controlling the sport of Australian rules at all levels. Even though they have no intention of spending time or money on AFL outside Australia, they still want to control whatever does go on.
Also, rather than being a federation of the individual leagues, it's mainly a group of Australians who want to coordinate things. As far as I know there was a time when the international leagues had more to do with the IAFC, but the AFL made recognising the AFL as sole controller of international australian rules a condition of any international league receiving any money from the AFL.
A lot of the leagues simply don't think the IAFC can offer them anything that the AFL can't - and so they take the bigger organisation to be affiliated with. This is why PNG, NZ, USA, Canada, Britain, Ireland, Japan, South Africa, Nauru, Samoa, Denmark and Sweden (who make up about 99% of the 20,000 or so playing AFL outside Australia) aren't affiliated with the IAFC.
That said, the IAFC continues to plug on, particularly with events such as the multicultural cup, which has secured state and federal support and have recently done a bit of development work with organisations trying to start AFL in a couple of Pacific nations and India.