Check history for precedents to this type of organization. In England from the days the Scandinavians and French were invading the people formed tythes or tythings. This was a group of ten people. From ten tythings a hundred was formed. Every hundred was permitted to form a court, have a sheriff, etc.
If you do a search on the internet for English maps from the 17th and 18th centuries you will see the areas mapped out by hundreds. The community was local. The point is you knew everyone in your group and you knew them pretty well.