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This quotation means several things. Imagine you're trying to colonize a new country. You don't know the people, the landscape, the climate, the resources, etc. If you make a single, unified plan before you start, and insist on central control from the home country, you're doomed to fail. Your plan won't match the reality, and there will be a huge disconnect in time, information, and emotion between the colonists and the people making decisions for them. (Sounds like the period just before the American Revolution, yes?) However, if you let many different colonies establish themselves, you can have essentially a blend between a market experiment and a science experiment: different models can be tried, and the best win/the worst fail. People can adapt, and will be responsible for their own lives.
It is moderately accurate, yes. To call it "genius" makes it sound more planned than it was, and there were places and times where direct planning was tried.
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