a minecraft server yes, but this is forcing same set of rules to every server
"People doing their own moderation" includes a community of people who get together, appoint moderators, and enforce their own rules.
The people appointing moderators are part of the central entity, unless you mean that the trolls being muted also have a say in it. Show me one such server that is not a tiny one with just a bunch of friends, where moderation is not needed anyway.