Government is necessary, really it is. Can you imagine what life would be like if people did whatever they liked, whenever they liked? Those folks who don't believe in evolution would get a big taste of "survival of the fittest" if there weren't rules in place and a body to enforce those rules--and history bears this out. However, the real issue is how big is big enough where governments are concerned?
Clearly there is a wide divergence of opinion on this subject from anarchy to dictatorship, but even toward the relative middle, there is a gulf between what is "fair" government. For some, the totality of government worth is tied to the amount of taxes that are extracted from them. For others, it is the perception of how safe their government makes them feel. For others, it is the use of government policies and their taxes to do the things that the private sector is unwilling or unable to do that produces equity or fairness.
As we are a representative democracy, it is not always practical for the electorate to vote on whether their tax dollars are being spent wisely or if laws are agreeable to the majority. In fact the way that the Constitution works assures everyone that whether they are in the majority or minority, their rights will be protected. Still, the powers that be in a locality, a state, or the federal government need to be informed by the citizenry and this is good.
To the point at hand. Do we need government to be small enough to drown in a bathtub or big enough to fill an Olympic-sized swimming pool? That is and probably always will be the million dollar question. I propose some "rules" for deciding if the government that affects you most is the right size:
1) Does the government deliver what it promises? For example, if a tax referendum occurs do the items the tax is raised for actually get paid for or are other unspecified projects moved up the list after the vote?
2) Are decisions made by the body a result of a desire of efficiencies or turf protecting? For instance, if an efficiency can be created by cooperating with other governmental bodies or with private interests, does it happen?
3) Are more people helped or hurt by the decisions that the government makes? This one is a hard rule to enforce because "help" and "hurt" are in the eyes of the beholder. My thought is if the rights of all are protected by an action, then do it.
4) Is the action taken by the government beneficial to the community it serves more times than not? In this regard I don't mean that you agree with every decision they make, but merely that the decisions made are intended to support the well-being of the community.
5) Could the job be done with less governance? Does a state need to create an agency when a oversight board would be as effective?
6) Does the government get in the way of people negotiating with those they have grievance with? Labor/management relations comes to mind on this point.
Certainly there could be other rules or a different way to right-size (e.g. determined by tax-rate formula). I leave that to your comment.