Regarding both questions, Gomes (2022) investigated this age-old issue, and suggested that variables could be used as grouping factors even if they have less than five levels, as long as the interest is not in the random effects but rather in the fixed effects.

Based on the above reference, as well as Brauer and Curtin (2018) and other references cited in these papers, it seems that 18 levels is often acceptable. Two levels, on the contrary, would be more contentious. Therefore, the option of including COUNTY as a fixed effect seems very reasonable to me.