Yes, its absolutely possible! Here are some thoughts on how it might be run:
1. The governance would be based on digital consensus.
2. This means that blockchain would be the place where it would happen
3. The modern democratic government is a body which governs a country by the proxy of the people. Since, there would be no central government. I think digital referendums would be commonplace. This would be due to the fact that there would be no voting in congress or the parliament and the people would directly be deciding what to do.
4. There would be no central bank or fiat money
5. The economy would be completely tokenized.