That’s basically what a Homeowner’s Association is. They can levy fees, prosecute violations of bylaws, and generally do whatever the bylaws say. They have very little oversight.

Doesn't the oversight come from the members?

I often read stories on the internet of how dysfunctional American HOAs are, and nobody ever explains why it's like that. HOAs in most other countries seem to work fine. But it sounds like they have too much power and not enough safeguards for democracy (like a quorum).

Most American HOAs work fine too. You only hear about the problems.