I think historically, Cardiff were members of the old Southern League which was composed of teams from southern territories and parts of the midlands including South Wales. The Southern and Northern leagues were amalgamated in the 1920's with the most successful/highest ranked teams from the respective leagues forming the four division structure we are familiar with. I don't think any club who committed to compete and helped forge the formative league system should have it's football league credentials questioned. I'm not a big Cardiff fan at all though, soz Bluebird.
It has always been the English Football league - now the English Premier League (with potentially two Welsh clubs next season), English Championship, English League One, etc. There are also teams like Berwick playing in Scotland and Chester was on the England/Wales border (ran through the ground IIRC) There is probably an argument to combine the leagues into a British league at the top 2 levels (probably not much difference in terms of English teams) and have regional leagues at lower levels but that would affect European places, etc
Despite the common misconception, it's never been the English Football League. I know it's Wikipedia but this explains it quite clearly: http://en.wikipedia.org/wiki/The_Football_League Or you could try the Official FL site: http://www.football-league.co.uk/page/History/HistoryDetail/0,,10794~1357277,00.html
Watford and Cardiff automatic for me and think Palace could be the play off winners with Leicester, Middlesbrough and Burnley getting the other top 6 places.
Can't see Watford making the top 2, particularly if they're deducted 10 points - apologies for the source: http://www.thesun.co.uk/sol/homepage/sport/football/4740801/Danny-Graham-Watford-in-the-dock.html Leicester for me btw. Top 6 will be as it currently stands - with Watford & Palace swapping places imo.
I think it's Cardiff's to lose. And good luck to them. My mate is a Bluebird so I've a soft spot for them. Then I'd say Leicester for second, with Palace through the playoffs. Don't rule out Wednesday though, they're too big for this division and the extra points added on for attendances will see them close.