Ludwig von Mises was an interesting individual who in his philosophy took human's ability to choose to its absolute extreme. He was a strong opponent of any form of coercion and believed that people should be able to make free independent choices in their lives, without anyone unnecessarily interfering with them.
The existence of a centralised state obviously is incompatible with this ideal. When there is a single entity that can impose its rules on you, without you being able to choose whether to abide or not to abide by them, then your freedoms are extremely limited, and you have very little control over your life, hence making it harder for you to self-actualise and achieve happiness.
Mises rightly noted that decentralisation of a state would lead to increase in personal liberties. In a decentralised state, his reasoning goes, different regions will have different legal systems, cultural norms, etc. Since moving from one region to another is associated with a much lower cost for the individual, than moving from one large centralised state to another, people will be much more prone to do so, and everyone will be able to move to the region matching their personal preferences the best.
However, even a very strongly decentralised state still limits what choices the individual can make. If the individual dislikes all the regions and wants to live somewhere else, they are not able to do so without leaving the country.
To this, he proposed a radical solution: extremely decentralised dynamic state. In his vision, there would be no central government at all, nor would there be permanently defined state borders. Instead, people would constantly voluntarily secede from the state and form new states, or unite into state confederations. Anyone who is unhappy in their current state would be able to secede and establish their own rules on their land.
This would lead to constantly evolving borders, legal systems, trade and immigration agreements. Since the states are going to be tiny, and there is going to be a large number of them, they will be strongly incentivised to compete for highly qualified labor by offering the people better quality of life, and the workers and enterpreneurs alike will be able to easily move to whatever state suits them the most.
I like to look at this system as a "free market of states", where, in analogy with the free market of goods and services, states constantly change and interact with each other by means of mutually beneficial exchanges, merge and split, and their "customers" (citizens), "employees" (bureaucrats) and "employers" (politicians) define how the states are run by voting with their "wallet" (feet).
Do you think this system is viable and a good replacement for the model of a centralised state? As far as I know, only one nation on Earth - Switzerland - has something similar implemented, and although they still have a fairly powerful central state, they give an unprecedented amount of independence to their regions and municipalities. The US system is supposed to work in a similar way, but since the Civil War a lot of self-governing and self-determination mechanisms were scrapped, and even states no longer have much in a way of independence.
Mises points out that Europe in the Dark Ages as a whole had a similar system, as central governments were fairly weak and experienced logistical problems in collecting taxes and tributes from their citizens, so most villages and cities were mostly self-reliant and did not depend on any governments. That system worked fairly well and promoted trade of goods and craftsmen, although it also facilitated the abundance of brigands and militant deserter groups.