@icedquinn without even doing it on purpose this is actually how I run them, just realized that lol. Most people are shit and looking out only fit their own self interest, so if the PCs do get anything out of them it'll be because it benefits them too. Makes things a bit more interesting.
@icedquinn idk a whole hell of a lot about this stuff, but I would assume that there would end up being different guards who are trying to enforce different rules from various rich people, which would either lead to one of them being bought out/killed off, or the area being split into two parts like gang territory, with the people choosing which one they would rather be a part of and each side trying to make the deal sweeter in some way. It would probably all boil back down to essentially taxes again.
However, in such a setting, if people are happy with the way things are then that is very unlikely to change. If they are unhappy, it usually comes down to the PCs to fix that in some way and it's usually because the ruler of that land is a bastard man that the PCs have to either kill or convince to change.
In my mind, the only way an "ancap" society works in a fantasy setting is for groups/races that are more nomadic. They still have a set of rules, but they are likely a bit more altruistic and the rules come from the way their society operates in general, not to weed out bad actors or anything like that. In my setting, it's the Faerials (basically elves who are born from nymphs). They all live in small towns in the forest and don't have any rulers or police because they don't actually need them. Humans will always need them, but the Faerials operate on a different standard, being fantasy creatures. The giants and cat people are like this to a certain degree as well, although for the latter they do not care much what happens to anyone who isn't a part of their race unless they can get some money out of it. The giants are just peaceful beings when living amongst themselves, but they have a lot of passion and so can be swayed by humans to help them, for better or for worse.
@icedquinn yeah I'm not saying it has to be something that you necessarily are forced into paying, just that you'll be living a higher standard of life if you do, for certain privileges like you said. Access to water, the town guard, city walls, etc.
Kings actually tended to give a shit about their people, to the point of actually going into battle for them. They needed their citizens to be happy with them otherwise they would either be killed by them or when it came time to fight, their people wouldn't want to fight for them. That is to say that a ruler would want their people to be happy, and forcing people into doing things like paying taxes for stuff they won't use is a good way to piss people off. That is really only necessary until a ruler reaches a certain level of power, though, in which scenario you get modern times where rulers don't have to care anymore because of the immense amount of power they wield.
That can happen in a fantasy setting too, in which case it is again up to the PCs to take care of the situation and free the people. This is the central motif to my setting, actually. Too much power corrupting people, but it's usually the ones who would be corrupted by it that seek it out in the first place.