Does spell damage work with Imperial Decree, and how does Imperial Decree interact with save effects like Zhonya's Hourglass?

Ruling: Yes, spell damage works with Imperial Decree. Imperial Decree triggers on any damage dealt to a unit, regardless of source. When a unit takes damage while Imperial Decree is active, it creates a pending trigger that will kill the unit.

Sequence:

• Damage is dealt to a unit (from spell, combat, or any source)
• Imperial Decree's "kill it" trigger becomes pending
• If damage is lethal, cleanup step attempts to kill the unit from damage
• If Zhonya's Hourglass is used, it prevents death from lethal damage and recalls the unit exhausted, then Zhonya's is destroyed
• Imperial Decree's pending trigger resolves and kills the unit

Nuances:

• If damage is LETHAL: Zhonya's saves the unit from the damage death, but Imperial Decree's trigger still resolves afterward and kills the unit anyway (the unit effectively "dies twice")
• If damage is NON-LETHAL: Zhonya's can successfully save the unit from Imperial Decree's kill trigger, and the unit survives at the Base
• Effects that modify Might (like -1 Might counters) or Stupefy do not count as damage and will not trigger Imperial Decree
• Imperial Decree only triggers once per damage instance