Ancient philosophers in general thought that it was to establish virtue or do good. Most modern public choice scholars are more modest in their evaluation of government.
We simply want government to provide those goods and services that people in fact want and that, for a variety of reasons, are hard to provide through the market.
Most people, for example, would like to have the poor taken care of by taxes on those better off. It is true they would have no objection if the poor were taken care of by voluntary contributions, but our experience seems to indicate that voluntary contributions don’t produce adequate funds for this purpose. Hence the use of the government to provide that particular service is generally approved. Of course, that does not prove that in general people are in favour of the exact quantity transferred or the methods used by the government.
There is a large literature on why certain types of things, sometimes called public goods, are provided by the market in a very inefficient way and will be provided in a better (although far from optimal) way by the government.
…We will just accept as a fact that there are a number of things which are better dealt with by the government. We will also accept as a fact that there are other things which are better dealt with by the market.
…In general, we want the government to give the citizens what they themselves want. That, indeed, is the point of democracy.
The smaller the government, the smaller the number of its voters. The smaller the number of voters, the more power each individual voter has. That’s one side of the argument.
On the other side, we have the fact that many government services are hard or impossible for small governmental units to provide.
These two arguments have to be set off against each other and since different government activities will turn out to have a different balance, having different governmental sizes is sensible.
… The existence of many small government units dealing with certain special problems has another advantage. Not only are these small governments more under the control of their voters in the sense that each individual voter’s preferences count for more than in the large government, their existence means that citizens may move from one to the other if they are dissatisfied.
Gordon Tullock
The New Federalist (1995)
New Zealand is not a federal state. I like federalism because a divided government is a weak government.
Utopia, you are standing in it! 
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