I first heard the term "GNUvernment" from William Waits. In fact, if you look it up on Google you'll find this. Let's keep this discussion going...
One thing is for sure, the roots of the word "gnuvernment" are "GNU" and "government". Each of these evokes a series of founding principles which, in turn, shape and are shaped by our societies' and their increasing use and dependence on technology.
What happens if you try to take the best principles of each and apply them to the other? I don't know. But it doesn't mean that I shouldn't even try to imagine it. Hmmmm... so what do you get when you take the best values from "GNU" and "government", mix in a dash of techno-revolutionary pipe dreaming and a pinch of common sense? Why don't you tell me?