Season 2 has been presumed for a long time. I don't know if it is officially "greenlit", but the writers always intended to do it.
People have been praising the show, but I saw something the other day that said it has really low viewership. I hope that doesn't tank season 2.
I initially thought there was talk of MULTIPLE seasons. Then, last week, Tony Gilroy and co were talking about just a second season. Guess we'll see, though it seems another season is, indeed, confirmed and is now filming.
Low viewership doesn't, necessarily, surprise me. The show DOES have a slow start, and it never does become the "pew pew spaceships!" show that Mandalorian or even Boba Fett were. This is VERY MUCH a hard political drama. This is about as close as Star Wars has ever gotten to the "prestige drama" HBO and the like covet so much. And it very much is NOT a show that's going to hit the same "buttons" as the prior Star Wars series. This is a series for Emmys, not toys.
That said, I'm very MUCH in the camp that has REALLY enjoyed what they did here. While I've been "in Star Wars" enough to see a lot of this other mediums, I can't recall any Star Wars live action project that actually touched on the more "extreme" realities the features films and cartoons often glossed over. Totalitarian governments and the rebellions they foster are messy and violent, and I think this is the first to really address that in a meaningful way (besides the little bit of lip service in Rogue One).