gussosa:maybe some Libertarian coder out there could be able to add Libertarianism as a form of government.
I've played a lot of Civ, and the problem with doing that in these kind of games - SimCity is another - is that the gameplay is entirely built around central control and collectivization of resources. It'd be kind of hard to even conceive of a playable game that wasn't - Libertarianism is, in a sense, the idea that nobody gets to be the player.
Still, some form of government beyond Democracy could be doable. The interesting thing about the game is how realistic the emergent behavior of the civilization you create is, in some subtle ways that I don't think were explicitly intended. One of them is that managing a large civ well is nearly impossible, and a lot of details slip by. Moving your government to "Minarchy" (requiring the "Privatization" advance, as you suggest), could relive the player of the burden of managing all those details, make some of them actually off-limits to the player. It could actually make the game more playable in the later stages.
The state won't go away once enough people want the state to go away,
the state will effectively disappear once enough people no longer care
that much whether it stays or goes. We don't need a revolution, we need
millions of them.