Government is not "mass hypnosis" -- but I could not possibly respond as clearly and as eloquently to your post as can Ayn Rand. She responds directly to your points, and defines government and its evolution. It is clearly not "mass hypnosis" in any sense, and believing that is dangerous. By the time you realize the logical fallacies in such a belief, the powers of a malignant government may have stripped you of your rights entirely.
Ayn Rand's essays on Mans Rights and tthe Nature of Government:
Regina