All games have a basic set of rules, even if that set of rules is "anything goes". On Viking MUD, we used to have a pretty loose set of rules, leaving much to the supposed common sense of the players. With the increased popularity of the Internet from 1995 and forward, however, it seemed that more detailed rules were necessary. So for us, "anything goes" is not the rule...
The rules are arbitrated by the administration, represented by the Law department's arch wizards.
Arch Wizards and Administrators are also contributors to the game, but with higher privileges and responsibility.
Well, in the MUD, we have a humoristic set of arch rules, but in practice, Arch Wizards are mostly bound by their common sense, and answer to their superiors. Administrators are equal among themselves, and, as far as the MUD is concerned, answer only to themselves and their common sense.
We are not claiming to be excempt from real world legislation, this is about in-game rules.
As an example, Arch Wizards and Administrators have access to privileged tools and information, which also brings a greater responsibility, particularly regarding privacy legislation.
Arch Wizards and Administrators sometimes have things to do which would normally conflict with the rules for mortal players or normal wizards. It would be very inconvenient if, for instance, an Arch Wizard couldn't wander about in open areas to investigate some particular bugs, or if they couldn't manipulate stats and clone equipment in order to test or fix problems.
The MUD depends on a certain level of trust between Arch Wizards and Administrators, and when someone has been appointed to Arch Wizard or Administrator, that is because s/he/it has earned that trust in some way. Because of that trust, in some ways, there is more tolerance between Arch Wizards, but also higher expectations.
A MUD should be an inclusive place, regardless of the player's background, and the Arch Wizards and Administrators are the people who enforce the rules of behaviour that ensures that players don't behave badly towards eachother. As such, Arch Wizards and Administrators should set the standard, and the standard should be high.
In some ways, Arch Wizards and Administrators could be expected to overstep some boundaries others shouldn't even get close to - e.g.: handling privacy issues and disputes may require looking into what player characters have done and said - but they shouldn't be assholes either.
If you feel that an Arch Wizard crosses the line, contact someone higher or equal in the MUD's power hierarchy. They will listen to what you have to say, and address the issue as necessary in order to resolve the conflict.