There are several ways to govern in a way that values freedom and individuality. Under traditional rulership, mandates come from the crown and a council of nobles, composed of individuals that more often than not got their positions based on heritary tradition instead of personal qualities, merit or intents which align with the wishes of the general populance. I think that chaotic leadership would be much more local, with cities having much more autonomy and having more say in who their noble leaders be. Nation-wide affairs can still be dicated by a monarch and his inner council, but their jurisdiction wouldn't extend far local affairs. People would also be more responsible for handling their own affairs, if a trading guild requires infrastructure, they would now have the means of building it themselves and sorting it out on a local level, instead of endlessly petitioning with far-away nobility, wading through a morass of bureaucracy, taxation regulations and so on.
I think that under such a system, the way leadership functions would indeed change. In an autocratic society, people will follow their king for the simple reason that he is king. They do hardly question the king's decissions, and the king makes sure that society is structered in such a way that disobedience is discouraged or punished. Under a chaotic system, leadership is still possible though. Instead it would be based on consensus and merit. People will choose to follow the king, because they know he is wise, they agree with his arguments, or because he made decissions in the past that turned out to have good results.
What if we choose not to obey our king? If everyone runs off chasing the winds, and the king sits in his splendid throne room with no subjects to obey him and no-one to dish out punishments? Is this not what Chaos will lead to, you may ask.
But is this not the same situation as it has always been? People can always choose to reject the law and the people that use the law to claim power and authority over others. Many institutions have been erected throughout history for no other purpose than to prevent this from happening by granting apparant unquestionable legitimacy to those in power. Many more a system has been built to insinuate that those in power have in fact the mandate of the people, while more often than not that mandate is bought by nothing more than lots of gold and a tight control over the people's means of communication, where any message to the contrary is drowned in propaganda of slick con artists that want nothing more than to pry that mandate of power from your little fingers. The message to the people is then, that THEY put these rulers in place, thus THEY are responsible for any idiotic policies that the leaders come up with (policies which more often than not harm the people that mandated these rulers in the first place). But lo and behold, the next time a mandate from the people is required, people once again empower the very same group of con artists (because of carefully applied gold, control over communication and relentless propaganda campaigns), with good-hearted new candidates for lordship not getting any chance to get their message out.
In fact, the simple truth is, that even the most deviously constructed system still requires the people's consent every day. Rulers need the people to enforce their will on others. They need the people to wage their wars. They need the people to build their castles. And as impressive as their armies and castles may seem, they need the people to keep them fed. Ironically, it is the people that often belong to the lowest castes, the peasants and fishermen, the bricklayers and the thatchers, those that serve our most basic needs of food and shelter, that are the ones with the power over life and death. Not the lords and ladies in their shiny castles or their armies with their swords and spears.
Any lawful system, no matter the claims of benevolence, will try to threaten deviants, threaten to lock them up, beat them into submission or even threaten to kill them. But it is an idle threat, never forget that. After all, they want your labor and your tax money. They don't want to lock you up or take your life, as there is no benefit in that, in fact it even COSTS them labor and tax to do so.
Power is always given, never taken.
I think that what King Blackthorn means with Chaos, is getting exactly this message out to the people. Empowering the people and allowing them the freedom to make their own decission who to give their power to. If King Blackthorn is true to his own principles, he cannot be an autocratic king, as he will need to prove himself worthy of the continuous support of the people to keep him in power under the new system he seems to advocate. He would have to stay in power based on his own merits and his deeds. He will have to work hard to serve the interests of the people he holds power over. He will not remain king for the simple reason that someone arbitrarily decided to put a crown on his head.
Signed,
Hotep Shakkara, Duchess of Trinsic, Lady of Mottecreek