Yes, there can be more than one of each race.
Later in the game, if any planets declare independence from various empires, you can even have upwards of 4 or more of a single race running around (though most of them will be one-planet colonies that declared independence).
The total number of possible players in a game is 32, even though you can only START a game with 18 (including the New Orions).
So yeah, it's both entirely normal to start a game with duplicates and it's entirely normal for the number of players to sometimes EXPAND rather than shrink later in a game.
Gives you another incentive to watch out for unrest
As for why STARTING with duplicates of the same race is not "unrealistic":
Read the backstory, folks... the idea behind the dublicates for each race is that the New Orions didn't necessarily make sure each race was entirely confined to its homeworld over the period of the "Dark Age". In some cases, stray colonies of one race might have escaped the Antarans' notice and others they just didn't bother with, etc, etc, etc.
Since the starting conditions of the game are that each of the player races are essentially the refugee leftovers after a dark age that reduced all of their civilizations to collective rubble and those ORIGINAL civilizations had colonies all over the place, it shouldn't be surprising that in the dark age they got seperated and formed their own independent civilizations when the dark age ended
From a GAMEPLAY standpoint... this provides an interesting means of preventing players from griping and playing rock-paper-scissors with each other to see who gets to play the Psilons in MP
