This article studies the conceptions of governance that appear in the fantasy literature. Although these works often alternate between monarchical governance (along medieval European lines) and hieratic governance (by priestly or wizardly orders), they often portray communities in which governments function as the classic nightwatchman of libertarian idealism - despite the typical sagacity and virtue of the governors. This seems to be a paradox, since small government is often thought to protect citizens against the rapacity or opportunism of the governors. I untangle this paradox by analysing the ethical principles developed in the Earthsea Trilogy, written by Ursula Le Guin. That book indicates an ethic of power - that, as one's power grows, so too do the constraints on its exercise to which one should adhere. The justifications for this idea are not dissimilar to the general theory of the second best in microeconomics. I analyse the implications of these principles for both children and adults.