Government exists due to free-market demand

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There would not be governments if people had not created them.

It might be argued that only the powerful wanted government, but is that not the very essence of the free (in the sense of unregulated) market? – those with more money have more influence on what products and services are available.

There certainly wasn't any government interference preventing the creation of government in the first place; for later governments, if there was another government interested in "interfering", it wasn't successful. In the case of the US, the English government tried to stop them, but failed.

I suppose it might be argued that if the English government hadn't been a presence in colonial America, we wouldn't have needed to form our own in order to fight it off – but this is an example of government as a tool for freedom. However poor a tool it may be, it still works better than nothing – otherwise there would be more non-government than government. The superpowers of the world would be anarchies, not plutocracies.

Either way, you can't argue that getting rid of one government will cause an increase in freedom. You'd have to get rid of all of them, simultaneously – and then prevent the market (the powerful) from recreating them.

I can't think of any way of doing that except by preventing anyone from becoming too much more powerful than anyone else.

I can't think of any way of doing that except by restricting freedom to some degree, in ways that will inevitably require coercion in some cases.