I’ll excerpt from one of my books on anarcho-capitalism.
What is the State?
... it is interchangeable with what is more commonly referred to as the “government.” However, using the term “government” in place of the “State” can be misleading as it insinuates that a Private Property or Free Market Anarchist society (aka anarcho-capitalist or voluntarist society), the market is the governing presence and enforceable rules and norms still exist, e.g. the non aggression principle. In the Free Market, no one may rightfully or legally commit aggression against the persons or property of others. In distinct contrast, however, the State is an institution which has the exclusive legal right to commit aggression against others in a geographical are. More specifically, the State is that institution which confers upon itself the status of ultimate arbiter in all conflicts, as well as the exclusive privilege to create, interpret, and enforce law. In addition to these privileges, it also retains the power to lay taxes on its citizens i.e. to make them pay for its “services” or else face fines, imprinsonment, or even death if arrest is resisted.
Excerpted from A Spontaneous Order, An Anarcho Capitalist case for a stateless society