Little parasites and big parasites
If there is anything that needs to be understood about government, it's that government is parasitic in nature. Its main tool is force, and its main role is to impose a single value system on everyone - the value system of the ruling class.
The bigger governments are, therefore, the more uniform the imposition of values becomes. This makes "global government" a gigantic problem for individualism. If you have a large set of small parasites, each with slighly different values (depending on the prevalent culture and beliefs), you are still relatively free to choose which parasite to live under. But if everyone lives under the same giant parasite, which, due to concentration of power, has its potential for utilitarian exploitation of the masses magnified tenfold, then there is no more choice.
There is no doubt in my mind that a global government would be a disaster of a magnitude greater than the Dark Ages, where at least one could try to escape religious persecution, as profoundly anchored in people's beliefs as it was.
Now, we must be careful not to confuse global governance with political unions. The European Union, for example, is not a global government because countries still retain their legal autonomy to a large part. But like all global parasites, it will strive to expand its powers without end.
Are there any disadvantages to governments occupying smaller territories ? Certainly. For one thing, a government occupying an area of a few thousand square meters would generate incredible overhead (right now only municipal levels occupy such small territories). Another problem is that a concentrated government rules over a smaller subset of value systems than a global one. Variety of opinions has a somewhat healthy influence on the consilience of government towards differing views. But if a government rules over an area where there is little variety of opinion, then there will be less tolerence for differing views.
However, this tolerence also has the opposite effect. Parents are allowed, in the name of "religious tolerence", to brainwash their children into evil, degrading and anti-scientific belief systems (Amish communities, fundamentalist Christian homeschooling, religious schools). So government is not a solution to the problem - all it does is provide a different justification for the imposition of value systems.
Fortunately, global governance is not in the cards any time soon. People are still too attached to their country and patriotism to submit to a global authority. This is one exception where general stupidity prevents a greater evil. However, if the current trend of rejecting religious beliefs in favour of political beliefs continues, I have no doubt that it will eventually come to that.
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