Even though the governments of many countries have not legalized Bitcoin, the people of those countries are using Bitcoin as per their convenience. The governments also know that they will not be able to control the use of Bitcoin, which is why they have decided to ban it by making only restrictions or laws. But it is not possible to reduce the number of Bitcoin users by making laws, rather the number of Bitcoin users is increasing. Even though the governments know about this, they are not able to show much activity. Because Bitcoin has created acceptance not only in its country but also worldwide.
Some countries have already reduce their restriction on the use of Bitcoin, while some are thinking about how to adopt Bitcoin in their countries. I think that the governments are only restricting Bitcoin now to avoid their responsibilities. However, it is certain that they must allow the use of Bitcoin in the future. The governments of countries that are wise and try to keep their own countries ahead of technological developments will definitely accept Bitcoin. They will plan and take the right decisions on how to adopt Bitcoin.
Depends on the country though.
If the governments aren't advanced in technology, they will not able to stop Bitcoin because they lack of knowledge. But, if we talks about China, where they have a lot restrictions including google, social medias etc, they could control almost everything.
If they detect there's an IP address connected to centralized exchanges, they might put an eye and watch that citizen closely.