To minimize the anarchy and chaos of the past, I propose that any citizen can be given the title of Marshal, by a simple permit offered by the Crown or the Palace. A marshal tasks themselves with upholding the law, to the best of their ability, outside the confines of the stone walls.
A simple badge is given to said marshal, showing their authority. Their background, their colors of arms, or anything else, is redundant in this situation.
The Marshal is tasked with upholding the law, and investigating potential criminal activity. Should a marshal prove worthy and proficient in their duties, it will be the decision of the Crown or Palace, whether further perks of office are granted.
Instead of making a new guard faction, and wasting time with forums and the like, if someone wishes to play an enforcer of the law, they get a "badge" and can enforce it however they wish. If they break the law, so be it. If they are a bit dirty, all the more fun. And if several players band together, create a player faction for it, they can build it into something more. But otherwise, any pc who wants to, can be a "lawenforcer" in areas without blue npcs.