Yeah, I guess what I envisage would be a very minimal federal government, rather than a central point of failure for decisions about every aspect of people’s lives. Very hard to get agreement at that scale though, as you say.
I look to Belgium as an example of the ideal world government. Trying to explain Belgium's government would require a wall covered in newspaper clippings and string, but the short form is that there are 6 independent governments with the same power as the federal government, with very long-standing cultural and linguistic strife between them. As a result, it is very hard to do much of anything on the federal level and instead, most decisions are made locally. As a result, despite Gent, Antwerp, and Brussels being about as far apart from each other as San Francisco and Palo Alto, each has a very different culture and regulatory environment regarding daily life. In Gent, it is completely normal to close one of the major roads into city center for a neighborhood festival. In Brussels, it requires weeks of fighting bureaucracy to legally block a side street for a few hours at 6AM with a moving van.
Even larger issues are handled locally. Until last year, even immigration and work permit issues were handled provincially. It would take 3-6 months to get my work permit renewed in Brussels, but after I moved to Gent, it took 2 weeks.
This all works because it is very hard to get national agreement on anything. Everybody knows that they're not going to be able to push their views on the country, so they work to change their local environment instead.
This is all despite the government being (IIRC) the largest employer in Belgium:
