A question from Yahoo! Answers:

What kind of government do you think Daoists would consider ideal?

Minimally sufficient and founded on consent rather than force. To quote from Lao Tsu:

Whenever you advise a ruler in the way of Tao, counsel him not to use force to conquer the universe. For this would only cause resistance. Thorn bushes spring up wherever the army has passed. Lean years follow in the wake of war. Just do what needs to be done. Never take advantage of power… Force is followed by loss of strength. This is not the way of Tao. That which goes against the Tao comes to an early end.

(verse 30. tr. Gia Fu Feng)