If it came preloaded with Duokan its either second hand or not a genuine Amazon kindle (even if its using 100% identical hardware).
1) You can register a kindle offline by entering the serial number on the Amazon site. Your serial number is displayed in the device info section of the settings screen (find it from the home menu). *NEVER* disclose the whole serial number to anyone except Amazon as it could let someone else hack your kindle account. You'd still need an active WiFi connection (or 3G whispernet) to email books to your kindle, but at least you could
transfer copy-protected books to it by USB.
2) Collections are only enabled on registered kindles that have synced with the Amazon servers - no connectivity ever == no collections.
If your Kindle cant be registered it may be blacklisted. If so you are S.O.L. Amazon wont help you and forum policy here prohibits discussion of any way of technically defeating the blacklist as blacklisted kindles are fairly likely to have been stolen at some point in their history + its actually illegal in many countries. Your only hope is if you have your faulty kindle and it has a good main board as then you can make a 'frankenKindle' with the good board which has its old serial number + everything else from the other Kindle.