On a distant planet in the far reaches of space, a colony called Wikitopia was founded.

A Terran securities speculator named Selaw Obmij funded the construction and maintenance of the colony's infrastructure. He ruled Wikitopia as God-king, making laws and appointing volunteer police officers to enforce them. If any disputes arose as to how to interpret the law, he made the ruling.

Obmij wanted the citizens to participate in the colony's governance, so all laws were electronically posted on a wiki that anyone could edit. Disagreements about what should be contained in the laws were discussed on the laws' talk pages. It was illegal for any citizen to revert a law three times in a 24-hour period, so the result was that laws generally reflected community consensus. Some Wikitopians objected that certain laws, and the exercise thereof, violated their fundamental rights. These complaints went unheeded, as it had been established early on that the only right a Wikitopian had was the right to leave and start their own colony outside Wikitopia.

Those who violated the law could be exiled from the colony, either for a fixed period or indefinitely; or they might be forbidden from trespassing in certain parts of it. Any police officer was allowed to exile an offender, but the exile could be overturned by any other police officer. If no officer was willing to overturn the exile, then the offender was held to be permanently banished.

There was also a law that said, "If a law prevents you from improving or maintaining Wikitopia, ignore it." Part of the purpose was to prevent offenders from attempting to lawyer their way out of punishment for a crime. Even if no specific law existed against what a person had done, a police officer could exile them on the basis of their being a troublesome person whose presence was harmful to the community. Some people objected that this was too vague, subjective and arbitrary, but the community deemed it better to avoid having detailed laws that tried to spell out every offense worthy of exile.

An online police noticeboard was set up, on which any citizen could post crime reports. Citizens could also add comments to others' reports, adding information or offering opinions. Gradually, it came to be accepted that if a rough consensus was reached on this noticeboard to exile a citizen, then a police officer should not overturn the exile; or else the officer might be viewed as having committed an offense himself.

The police themselves were no longer appointed by Obmij; rather, they were elected by citizens. Any citizen in good standing could be nominated for election to the police force. Approximately a four-fifths vote was required to elect, but this could be waived in borderline situations if the election judge thought it was warranted.

When the community was small, all these systems worked well. Everyone knew everyone, so people had some familiarity by which to judge whether a candidate would make a good police officer or whether a person who committed an offense should be banished. Also, people were generally well-apprised of what was going on in the community. If something was going on that affected a Wikitopian's interests, he could find out about it and participate with little effort.

But as the community got larger, some problems arose. The number of simultaneously ongoing discussions increased to the point at which it became impossible for everyone to keep track of all the elections, all the proposed changes to the laws and all the complaints on the police noticeboard. Many citizens were too busy working and doing other productive activities to make sure that the laws were being changed in good ways and that the police were not abusing their powers. Moreover, the community was too big for people to personally know all the police officer candidates anymore, and the elections came to be criticized for being decided on arbitrary and flawed bases. The elections and laws began to be controlled by small subsets of interested citizens who happened to have more time to spend paying attention to proposed police force additions and revisions to the statutes, and the enforcement began to be controlled by mobs that would show up to the police noticeboard and ask that someone be banished. In short, the decisions were no longer representative of the community as a whole.

The problem may have been aggravated by the fact that it was illegal to campaign for anything. If legislation to prohibit the practice of doing x was proposed, and a citizen knew five other friends who liked doing x, he was not allowed to contact them to tell them about the pending legislation. The theory was that if campaigning were allowed, everyone would need to campaign in order to get a fair chance at their viewpoints' adoption, and all Wikitopia would be deluged with campaign ads. Instead, it was deemed better to have decisions made based on random factors such as who happened to be bored enough to browse through the Colony Pump discussions that day.

Some people began suggesting that the colony had outgrown direct democracy, and that a legislature needed to be created. But there were many challenges to doing this. When would the legislature have its online meeting? Wikitopia was very large, encompassing 24 time zones. Would legislators in certain time zones be expected to wake up at 3 AM to attend? Or would they be paid to travel to a meeting place and vote? This could be quite expensive, and could only be done infrequently.

Could business be conducted in some way other than a meeting? Suppose a mailing list were used instead. How could laws be discussed and changed? If twelve legislators proposed twelve conflicting amendments to pending legislation, how would this process be managed in a mailing list?

Moreover, because Wikitopia was a fairly transient place, with people settling temporarily, leaving, coming back, etc., there was no central registry of voters. Rather, people participated in the various legislative wikis, noticeboards, etc. using accounts created online, from computers all over the planet. But there were no sure safeguards against people setting up multiple accounts and voting more than once. How could the integrity of elections be ensured?

Also, some people viewed the very concept of voting as being contrary to the concepts on which Wikitopia was founded.