therein lies a potential problem with her story if she doesn't specify who, how and why a regent takes over. it can be a chancellor, an archbishop, the king's uncle nephew's second cousin's roommate twice removed to the power of three... really whoever you want it to be, i guess. *but*... there should be a theory there. doesn't have to be anything complicated, just a mention of how it was arrived at that so-and-so becomes the top dawg. or it can be incredibly convoluted. (duh. i mention this only for the sake of thoroughness.)
i think you're absolutely right, Z: lucas was trying to stuff the romance of a monarchy down the throat of democracy. whether it worked is subjective (i found myself embarrassed to be a big 'star wars' fan at times). i think it's worth mentioning that you can have it somewhat both ways, monarchy and democracy, depending on how you handle it, the level of sophistication you want to put into it, and what your audience will bear to read. (i'm waiting for someone to say, 'america isn't a true democracy, it's a republic.')
personally, if you're going for mass appeal, i'd consider the position of regent (if you want to call it a chancellorly/ship, you'd probably be technically wrong and would have to explain that) as being one that's an elected office. there's plenty of room for commentary here. who puts the votes in? that polish system, if i remember right, was voted on by any noble who physically attended the vote, which, if they all did, could have been upwards of half a million people! now, in your world, it's unlikely all the peasants will have a vote for obvious reasons. i'd be like me voting for the mayor of your town. that is, the average dirt farmer has no idea who the candidates are. so, at best, what you'd have is a represenative vote, the nobility casting their ballots. that's essentially pretty americanized, at least enough so to where you've got a much more idealized version of how it should be than crass power plays and back-room politics to arrive at the temporary king. unless someone comes up with something better, i think this is a good system that's simple and yet has an innocence that sets itself up as being able to fall from grace. i feel a lot of it depends on the chancellor's attitude before being regent: does he manipulate his way into the seat or does he become corrupted by the power? that's very important to me as i feel it's got profound implications on the rest of the story's gov't situation.
the problem there is, as mentioned, historically, the church had an incredible influence. and lest we forget, the vatican could have been every bit as corrupt and brutal as any warlord or dictatorship. how these things are in your world i don't know, just yet more to consider.
short answer, yes, a chancellor can be regent. i think you've got enough evidence here to swing it given the idea you explain it at least a little bit. being fiction, it's not necessarily wide open, but you've got a lot of ways you can go and still be able to argue it's 'correct.' i don't know the level of intrigue you want. for me, i always had a problem writing these kinds of stories because once i start looking for a fact, i get caught up in all the history and the story starts becoming something else than i intended, lol.