[I wrote this a while back during the decentralism/anarcho-pluralism debate in the online anarchist and left-libertarian community, but didn't post it back then because, after writing it, nothing in it seemed to me nonobvious enough to require exposition. Since the debate is still continuing, however, I decided to post it, since it clearly lays out what one anarcho-pluralist (at least) thinks such a decentralized milieu would be like. Lately, I've been working on a second article based on what I've since learned from Bill Bishop's The Big Sort, which provides a number of insights about the process and effects of voluntary segregation. I'll post it when I have it written up and HTMLed.]
There's an assumption which seems to be held by both National-Anarchists and anti-National Anarchists alike: that decentralized, organic communities will necessarily be socially conservative, much more so than communities in the same geographical areas under statism, and they will remain so permanently with no incentive to change. I do not see any reason to assume this. The fallacy arises from the fact that the only such small-scale, autonomous societies that we currently know of, with few exceptions, are from earlier stages of history: tribal, ancient and medieval. Therefore these simple societies serve as the image and model in terms of which we imagine decentralism. There is, however, no reason to assume that a shift to political and economic localism will necessarily require a regression toward more restrictive traditional mores, any more than it need require the abandonment of modern science and technology.
Also, the decentralization of cities does not necessarily involve converting them into small villages, or geographically-separated sets of villages. Rather, neighborhoods or sections of the city can become politically autonomous while keeping the physical infrastructure intact. Kropotkin wrote in his Mutual Aid about such independent districts in medieval cities, as well as trade guilds and other organizations which performed some of the functions now attributed to municipal governments. Each city, then, would become a mini-federation.
What, then, would such a decentralized micronationalist confederation, carved from the midst of current American society (for the sake of example) be like? Well, my guess is that the regions that secede, urban and otherwise, will likely retain, at least initially, much the same local cultures they had previously. It is highly unlikely that there will be a mass rush towards Fundamentalist repression, lynching of gays, enforced wearing of the burkha or other unpleasant surprises. Most Americans hold preferences for at least a moderate amount of liberty and tolerance. If a particular autonomous community offers less freedom than the surrounding society, it will find it hard to gain adherents unless it offers some special benefits to compensate.
How would this system develop over time? The main difference between a decentralized world and our current one is that there will be more options, and more opportunities to "vote with your feet" by migration or secession. The result will be some approximation to a free market of sociopolitical systems. And the more closely it approximates to a free market, the more closely it will come to satisfying people's actual preferences. Since people's preferences are different and diverse, there will be a multitude of different niches, which will also be shaped by the requirements of location, demographics, industry and other variables. Preferences, of course, are always changing, along with other factors, so there will be stasis but a dynamically evolving milieu -- a catallaxy.
Instant perfection is by no means guaranteed, but a panarchic-micronalist arrangement would put into play the mechanisms for gradual and cumulative improvement.
If anyone asserts that authoritarianism, small-mindedness and illiberal values would prevail, one must ask, Why would they? What makes such memes so specially attractive that people would choose to "buy" them over their competitors? In most cases, it is the opposite: people stick with repressive customs because they believe they have no other choice.
Since someone mentioned Babylon 5, allow me to propose a new model for decentralism: the space colony. Imagine a society of enlightened, rational and forward-looking people, pioneers in outer space, who build their own habitats, terraform their own land, manufacture their own air, operate a thriving spaceport, and deal with the rest of the universe on their own terms.
If that's a bit too far ahead to envision, these words by Murray Bookchin in Our Synthetic Environment may be closer to home: "'But why should an emphasis on agriculture and urban regionalism be regarded as an attempt to return to the past? Can we not develop our environment more selectively, more subtly, and more rationally tjhan we have thus far, combining the best of the past and present and bringing forth a new synthesis of man and nature, nation and region, town and country?" And, someday, Earth and Space.