Government has a few more features than what you've described. The big one is that a government will not let anyone compete with it or withdraw from it, at least in the geographical area it has claimed for itself. It's based on force and coercion, and if we think such things are bad, how can we think government can be good?
Let me explain how I think it might happen, the kind of direction I want to see in the world.
Suppose the lot of us here on the forums decided that we would no longer take each other to court if we ever had to, that we would instead try to work it out here, and if we couldn't get to an agreement, we'd let Steve decide. Ultimately, as there would be more and more of us, we would be forming in essence our own court system. We would almost always prefer to deal within that court system, offering it to outsiders if they wished, and tending to do riskier business deals with those already in the system.
It's not some sudden, gut wrenching revolution. Simply, over time, people who are more conscious will separate from different parts of society. Not from society as a whole, mind you, but from the parts we can't abide because they rely on force, or fear, or stupidity, or greed. And always, inviting others to join us.
This not only propogates itself, helping more people become more aware, but as it does, it renders the existing institutions less and less relevant, and less and less powerful. I doubt that government would ever be overthrown, more like it would fade away as people needed it less and less, until some final impetus kicks it into the dustbin of history.
Not that I'm an optimist or anything...
