I am looking for some clarification to how Google Smart Home works. I am looking to integrate my current end device which control lights with Google Smart Home.
My end device is running a very small microcontroller utilizing an RTOS (Linux is not available)
Here is how I see it (Please correct or comment)
Questions
That is a pretty basic summary of things - yes.
The crucial point there is that issuing a command to the Google Home does not have it send out a message on your local network. Google issues any commands from their network - not from your device.
This might seem like a minor detail, but it doesn't need to be a "cloud service" that you control that Google talks to. It does need to be a publicly accessible HTTPS endpoint. This could be a cloud service (and it would be in most cases), a public non-cloud server, or even just a public URL that has a tunnel to your private network (such as with ngrok).
The last is really how you'd get around having your own cloud service - you can setup the control on a local machine, and have a tunnel using ngrok.