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Muddy Reefs is a pirate town. It is full of pirates. Piracy and para-piratical activities occur here.
Actually, it's not so much a 'town' as 'a cove that a whole bunch of pirates happened to pull in to repeatedly.' There are a lot of bars, a lot of hotels, a lot of brothels, and a lot of buying and selling. There are even a lot of houses. Public works, such as they are, are payed for by various wealthy citizens.
Much like Coral, influence is largely gathered from popular perception of being a wealthy philanthropist (though the perception is far more important than any actual reality, it's much easier for an actual wealthy philanthropist to fit that criterion). This perception is usually reinforced by occasional extravagant displays (mostly festivals, i.e. free booze), living in a large house, and building public works (roads, docks, and the Merchant's Consortium building).
There are currently three individuals with significant influence in Muddy Reefs:
There is no formal police or defense force, but as might be expected in a town full of pirates, there are many bouncers and bodyguards. They have formed a loose confederation, charge exorbitant rates for infighting, and will occasionally act together to prevent riots and such. This is not so much from a sense of civic duty as from a recognition that their lives are much easier when disturbances are confined to localized bar fights.
Oddly, there isn't a lot of crime in Muddy Reefs. Sure, you can get robbed, or murdered, or marooned, or any number of other unpleasant things, but those aren't crimes (usually). 'Crime' is something that offends the Bouncers enough to hunt you down, or offends someone wealthy enough to pay the bouncers to hunt you down. Incidentally, some of the merchants get quite touchy about breach of contract, so you can usually rely on someone to at least make an effort to look like they're dealing in good faith. YMMV.
Muddy Reefs is located in an unclaimed/contested area between Skullstone, the Coral Protectorates, and whatever that third one is.