Minecraft wiki entry for Building_a_metropolis, associated text: Adapted Direct Democracy
A system adapted from here into a Minecraft City.
There is only one hierarchy level: citizen. However, owners of the city may also have privileges, if you want.
Every day/5 days (recommended)/week (recommended)/half a month/month/etc. citizens can go the assembly place or to somewhere else, preferably in the downtown, where they have an assembly to decide the important subjects abut the city. They can also vote at the end of each discussion.
There are rich and poor, but all of them get the same privileges and can go to the assembles (but some help for the poor).
There be also another hierarchy level: director. They direct the assembly. It is recommended to have them when you have a considerably large amount of players. They can be chosen by votes or in an assembly.
The currency can be whatever you want, but it is recommended to have an un-falsificatable currency, like signed books by you. You can even put text and ACSII art inside them!