Your design is basically good and an example of Declarative Programming. You should read your XML files using an XML parser either into a DOM or using SAX. Since I think you will want to revisit nodes I suspect you will need a DOM (FWIW I use XOM, xom.nu). One of the best examples of XML-based declarative programming is XSLT where the data and commands are all XML.
I use this model a great deal. It has the advantage that the data structure can be external and can be edited.
(Note that your XML needs a root element)
but it's gotten very messy, mainly because the methods don't distinguish between attributes and elements.
All DOM or SAX tools differentiate very clearly between attributes and elements, so if there is confusion it is somewhere else.