And how does one decide which is which?
Primarily through bible study and following the holy spirit. Generally, there are some things that can only be done under a governmental system. The most obvious ones that comes to mind is the death penalty instituted in Israel for various offenses:
Lev 20:10 And the man that committeth adultery with another man's wife, even he that committeth adultery with his neighbor's wife, the adulterer and the adulteress shall surely be put to death.
This is something that can only be administered under a system of government. In Deuteronomy, God outlines what the procedures are:
Deu 17:6 At the mouth of two witnesses, or three witnesses, shall he that is worthy of death be put to death; but at the mouth of one witness he shall not be put to death.
Deu 17:7 The hands of the witnesses shall be first upon him to put him to death, and afterward the hands of all the people. So thou shalt put the evil away from among you.
Deu 17:8 If there arise a matter too hard for thee in judgment, between blood and blood, between plea and plea, and between stroke and stroke, being matters of controversy within thy gates: then shalt thou arise, and get thee up into the place which the LORD thy God shall choose;
Deu 17:9 And thou shalt come unto the priests the Levites, and unto the judge that shall be in those days, and inquire; and they shall show thee the sentence of judgment:
Deu 17:10 And thou shalt do according to the sentence, which they of that place which the LORD shall choose shall show thee; and thou shalt observe to do according to all that they inform thee:
So God was laying out the foundation of government that he required of Israel.