Seemed like people here may find bits of this interesting
Nomenclature note: Tarascans is the Spanish term, their own name for themselves was the Purhepecha, and the Nahuatl term was Michhuah (“those with fish,” possibly referring to the large amounts of lakes in the Tarascan Empire). Tarascan is the term most used in historical and archaeological writing.
The Tarascans are a bit of an oddity in Mesoamerican history. Their culture and their language don't seem to fit neatly into any early predecessor like the rest of the groups in Pre-Colombian Mexico. There are some theories that they actually were a group that migrated from the Pacific coast of South America, but that's a whole other question.
Anyway, the Tarascans lived in what is now the state of Michoacan (cooperation with the Spanish post-Conquest meant their political borders stayed more or less intact). Their Empire was based on a plateau Northwest of the Valley of Mexico, separated by the Valley of Tolocan. They had a more centralized “territorial” Empire than the Aztecs, but the big thing that always gets mentioned about them was their skill in metallurgy.
A popular misconception was that Native Americans never learned to work metal, which is blatantly false if you stop to think about it for more than 3 seconds. After all, the Aztecs had heaps of gold for the Spanish to drool over. It is also not true, however, that Native American people never made metal tools either. The Inca and their predecessors, the Chimu, both used copper and bronze. The use was mostly in tools, but some weaponry as well. The Tarascans, though, were the sole Mesoamerican people to utilize copper and bronze in their tools and weaponry (Note: this is another reason for the theory of a S. American origin of the Tarascans).
Another key thing to note about the Tarascans is that they had already soundly whipped an Aztec invasion force once before. The Tlatoani Axayacatl lead a a campaign into Tarascan territory in 1479-80, which was basically completely wiped out. The number aren't exact, but out of 20-30K troops, the Aztecs came home with a few hundred.
There are various reasons for this defeat (the Aztecs were outnumbered, they were too far from their supply lines, the Tarascans knew the land better, etc.), but the end result is that the Aztecs basically gave up on trying to conquer the Tarascans. The Valley of Tolocan was setup as a buffer zone and was one of the few places the Aztecs actively settled and garrisoned. If you know your Roman history, this was the Aztec's own Battle of the Teutoburg Forest.
Threat Assessment: The Tarascans lacked the overwhelming numbers of the Aztecs, but their more central government and metallurgical skills makes them the oft cited candidate to succeed the Aztecs in any counter-factual scenario. Conceivably, had the Aztecs experience a period of internal weakness, they could have made major advances. Speaking of interal weaknesses, let's talk about the biggest threat to the Aztecs, themselves.