In principle I agree with you, I just think that your scale is not practicable. Democratic government is a necessary evil, because without it, the stronger members of society start bullying the weaker members of society until a mafia emerges that doesn't give a shit about the non-aggression principle.
I would love to be proven wrong though...
Democratic government
is the stronger members of society bullying the weak.
Look at the US fight over Gay marriage. Because they're in the minority, they are denied the right to sign a contract!
So they move to states that are gay-friendly like California and form gay colonies, thus taking away tax dollars and brainpower from gay-unfriendly states. (statistically, gays are more wealthy and industrious than non-gays).
That is an example of competitive government, though an imperfect one.
The question is: Would gays be better off in an anarchy where the majority is homophobic? I seriously doubt it. An anarchy has no "bill of rights". They would be marginalized and ostracized by the major Personal Defense Agencies to the point of being unable to function in society ... until they congregate in a gay colony somewhere far away and form their own Personal Defense Agency.
Either way, they are still forced to move.