> if you live in a free country, any government you have by definition reflects the will of the people.

There's no such definition, where did you get that from? The only definition is "The price of freedom is eternal vigilance".

> If you're afraid of what the government might do, you're really afraid of what your fellow citizens might do.

In non-fantasy land all power corrupts.

> you might want to pass a law that makes it illegal for a bank to refuse to offer basic services to you

We don't pass laws, our representatives do, we select reps from a pool of candidates but becoming a candidate outside of the established parties is subject to the regulations established by these parties... you get the idea.

> As a citizen of a small country with decently long democratic traditions, I've always found American attitudes like that weird.

There's bliss and then there's reality... which happens to be weird, unfortunately.