Of course we're discussing amount of authority. I'm...not even sure how to reliably measure the physical size of a government? Perhaps number of employees, but even that feels like a poor approximation.
More to the point, the government has the authority that we grant it. We still have a massive drone war and electronic surveillance and marijuana laws because we as a collective society are ok with it. Or at least apathetic. Sure, subsets have been railing against them for a long time, but collectively it's been insufficient to get action. But if society decides enough, then it changes the government. Slowly, to be sure, but that's the way the founding fathers preferred it. We're seeing that societal change on a state-by-state basis with marijuana, we saw it with the US entrance into the World Wars, end of the Vietnam War, etc etc. If society tolerates it, it continues. Jim Crow laws weren't imposed on a tolerant South by overreaching state governments, they were passed by a racist society.
All of this is open to abuse, but what human system isn't? It's only allowed to become and remain abusive because of collectively being ok or apathetic about it. Did the societies of those cities/states that shut down lemonade stands change the laws that granted the authority to do so, or did they move on after it dropped off the news and leave the laws and authority in place?