Is it possible to create a local multiplayer game with more then 4 players?
The Unity Input Manager allows you to define input from 11 separate joysticks and, I believe has a total of 80 individual input axes (so, if you wanted each player to have, say, 10 possible inputs, you’d be limited to 8 players).
Yes, AFAIK; where are you getting “4” from?
http://docs.unity3d.com/Documentation/Components/NetworkReferenceGuide.html