I have been reading Caesar and Christ by Will Durant. It's a history of Rome and the rest of the ancient world at the time of Rome's dominance. Reading about the intrigues of the Romans, simply impressed upon me how complicated the laws and government of the Republic were. Often in modern society we have this opinion that our government is better than those in the past and that government was smaller and simpler. Yet if we study ancient history we find quite the opposite, their laws and customs were just as complicated and obscure as ours are today. just because their constitution wasn't written on a piece of paper doesn't mean it wasn't just as binding or important to them. The corruption present was probably greater then anything we have ever seen in the US. Everything we know about ancient Rome shows they were our equals in bureaucracy, legislation, class warfare, and corruption. This also applies to all the other ancient governments we have good records of. We can conclude that everyone of the ancient world, whether we have good records for them or not, had sophisticated governments because of all the ones we do know about and it doesn't make sense for other peoples not to govern themselves; it's not like certain groups of humans are less intelligent then others.
To link this topic to D&D is pretty simple. Every village, city, and country should have sophisticated laws and customs and methods of self-governance. There should be no group of humanoids (by humanoid I mean any species like humans in mental function and physical appearance) in a Utopian society where everything is shared and there is no central government, everybody just gets along. That just doesn't happen. There is always a government. The strong try to rule the weak, whether that is one very powerful man, or a group of aristocrats, or simply the majority in a democracy. Their is always a government and the methods by which it functions are complicated and based on ancient customs called "the constitution" and "common law". It is not like cities just appear overnight with no previous history. The history of a people determines and is determined by their laws and government.