This is a country idea that I feel like I'm not going to be able to create for a while because I have another country idea that I like a bit more that I want to develop before this one, and you can't really have two territories without developing the first one.
I still want to write this down because I still want to see it happen, and I may either use it later or hopefully inspire somebody to make it if they don't really have any ideas.
Dedos Piedra is a group of small five islands initially colonized when that was the cool thing for a country to do. The Island had very little worth as either a plantation or a port, since the soil didn't grow much on the primarily rocky islands and it was very isolated.
Despite this, a small population stayed on the island. These were mostly privateers who used the islands as a place to regroup and dock their ships for periods of time. This appeared to be the primary purpose of the island, and it seemed like as time went on the Island's colonial masters grew less and less interested in it.
When Privateering grew out of fashion, the privateers-turned-pirates seized the island and claimed it for themselves as a base. Dedos Piedra seemed only very lightly governed by a set of codes that ensured that the pirates ran their ships democratically, shared plunder equally, and selected and deposed their captains by popular vote. This became a loose confederation around the area that eventually consumed nearby islands.
The main center of the government is a council of captains that votes on modifications to the codes. This council also elects a primary head of state, or 'Captain of the Pirates', who would work as the primary executive head.
This state remained primarily because it was too unimportant and too distant for it's previous colonial master to really do anything about, and thus it has continued on in a way to this present day. Today, this state is no longer the 'Pirate Republic' it once was, and has now primarily become a minarchist federation where businesses often attempt to set up headquarters (to escape tax laws and other regulations). This is primarily what keeps the Economy of Dedos Piedra alive and prevents it from dying completely.
Now the council is primarily dominated by influential wealthy people who, in some's opinion, do not represent the needs of population. In addition, what became the primary police force is scattered and small and not particularly effective.