re: Villain power scale- Sauron compared to Palpatine?

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The Emperor Has the Death Star to blow up Middle Earth and they have better firepower (tie fighters, lasers, Atats and Star destroyer) to take out their armies too.

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That wouldn't matter...

if you dig into Tolkien some (read the Silmarillion), you learn that the Ainur constructed the physical universe (Eä), of which Arda (the world, or what we call the Earth) is merely one planet.
Sauron is one of the Ainur, initially of Aulë's people. So he's involved with the development of matter.

These beings nerf themselves to interact with Elves and Men, because they have a desire to interact with and guide/control/rule them. Morgoth and Sauron don't outright destroy Arda because they want it for themselves. But beings of that level have Death Star abilities intrinsic with their own beings, not reliant on technology.