Ron Maimon has mentioned in the related answer that giving too much power to the community can endanger the site as trolls can easily take over it, if they come in huge mobs, and especially when the real community is small. This was what happened on Wikipedia, and many places elsewhere too.
However, I disagree that this is bound to happen. MathsOverflow is functioning smoothly despite having very strong community moderation. I think that on a high-level site, such mobs cannot take over. On Wikipedia, these mobs had an advantage because the policies explicitly stated that "over-technical" content should be removed. This lead to disastrous consequences when it was implemented by such mobs in the physics portal too. Many good contributors like Slawomir Bialy, Likebox, Brews Ohare, someone whose name I forgot, etc. were kicked out, etc.
BUT, the reason why mobs can't take over MathsOverflow is not only that it is exclusively high-level, but also that it has reputation-based Community Moderation, not blind community moderation.
If a site is not exclusively high-level, and exercises reputation-based Community Moderation, it can still be attacked by mobs who get reptuation from posting basic posts.
If a site is not exclusively high-level, and does not exercise reputation-based Community Moderation, then we ignore what happens to it.
If a site is exclusively high-level, but does not exercise reputation-based Community Moderation (but instead blind Community Moderation), then as Ron correctly said, it has a chance of being overrun by mobs.
The solution is, that we must make the Community Moderation visible only to users with at least 500 rep (which is the same amount of rep that is needed to edit posts). If we see that users gain rep faster than expected, then this could be highered if needed. Same goes for the rep needed to edit posts.
I will need to update the FAQ...
I remember Dilaton saying that hiding a category can be done through the admin panel, but at least I still haven't found out where this can be done.
Is there any issue with this proposal?