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Choice and Fulvio you could not be so far off the in a lot of what you are saying about the districts/championship sides!
I have experienced playing for both prem and districts teams and can tell there is definitely a different atmosphere between the two. The district teams are much more open and players from all grades mingle together stay for drinks after training and generally enjoy each others company regardless of the level at which the players play. At prem I could not see much mingling between grades.
I do not believe that players play district to be the big fish in a small pond, at least that did not apply to me and most of the guys that I have played with would give you the same answer as me and obviously you will have some who will fit that but they would be the exceptions rather than the norm.