Lets imagine a world without government. We all live more or less in private territories. Those territories need a way to harmonize rules and procedures. (ie. if you drive your car from Territory A to B, your insurance company wants to make sure things like road conditions and traffic rules are harmonized to an equal standard between territories to provide coverage).

It becomes in every territories best interest to more / less agree with these standards as it makes commerce so much easier (ie. Our territory agrees to "milk pasteurization definition ABC", so a buyer in a foreign territory can be assured that its of sufficient quality, etc).

In order to create these standards bodies, various insurance companies will each vie to get their representatives appointed. Pretty soon, as these things progress, these 'standards bodies' will become the lynchpin where all political infighting happens. It will become the place where backroom deals are done, where corruption happens, etc. In a sense it just becomes the new 'gov' - the deal making clearing-house between territory owners and insurance companies.

Will this be better than what we have now? Perhaps, at least in theory. How much in practice? Unknown....

That is one view, which I don't fully disagree with, but there is another view: The "Deep Ancap" view, which is: We already live in ancapistan. What you see around you (the state) is itself the product of market forces. The state doesn't exist in spite of free-market forces, but because of it. That is, people and corporations desire to have universal authorities so, market forces put those entities in place.