You fail to tell the whole truth..
The town was a very corrupt town run by organized crime, politicians were bought...
The town, threw out it's government and now is self governing, in a direct form of DEMOCRACY.
The town as a whole, make the decisions of government of the town, they have a police which they control, they hold trials for crimes and breakage of law. They still have laws and, they make new ones, when they are needed.
They still listen to authorities on matters that are pertinent to the town.
That is not "No Governmemt, direct democracy is not no government.