Althought I enjoyed the videogame a lot (and still do), the retcon made by the House Arano book poses a few problems to me. As we have no other mention of the nation in any other book released afterwards (if there is any, please tell :)), it is my opinion that the Aurigan Coalition must have fallen some time later of the book events. This is my take on this:
As the FS began the 4th SW with their invasion of the CC, the Taurian government, in its paranoia, began to look again towards the Coalition as a loose end, a liability on their flank. Seeing Davion spies and puppets everywhere, they take things in their hands, but to not endanger their defenses, the TC begins to hire some mercenary commands, company size at most, to deal with the aurigans in a covert way, posing as pirates, hitting the borders, destabilizing even more the delicate situation in Coalition space.
As the Magistracy keeps looking more and more towards Andurien and the CC, it gives less and less suport to the aurigans.
The death knell comes with the ending of the 4SW and the beginning of the Andurien-Magistracy invasion of the CC. All suport is cut out, as the Magestrix focus completely on her war. Seeing the opportunity the TC invades the Aurigan Coalition to deal the last blow, forcing a "devious davion sympathizer" out of the game table. The Tc absorbs some Coalition worlds, and the rest devolve into independent entities, some failing to be viable. The Aurigan Coalition is no more, a footnote on history books about the Periphery as another failed state.
I'm thinking of even using this scenario as the setting of a ATOW game, with the players being mercenaries contracted to deal with the Coalition, and all the moral dilemmas they will have to deal with.