Minecraft wiki entry for Building_a_metropolis, associated text: Easy System
There is only one higher power, a mayor, king or emperor or anything else that is similar.
Everyone must trade for stuff or get it themselves.
Jails are a must-have here because an admin may not be on if something happens so the police will have to do some work there. Bans only if they do things like griefing, hacking etc.
The mayor, king or emperor has only a few higher powers over the town, such as giving a yes/no to house building
No one cares if you have many diamonds or none, you are respected for who you are, not how wealthy you are.
People build their own houses rather than having diamond fewer people build them for them so that cobblestone and/or planks they've obtained have an actual purpose.