The type of government you choose for your colony affects it in various ways, see their detailed descriptions below.

You can only change it once every 30 game days, or 12 real hours.

You rule with an iron fist, and your citizens only have one purpose: hard work. There is little room for creativity, and very few people will look to migrate to your colony. However, even less manage to leave. If the colony is attacked, more civilians will help defend it. Not out of patriotism, but because "or else"

Autocracy is not a good approach for creating that happy utopia, but it is a viable option for inhospitable places, using force to prevent people from leaving and making them work the mines extra hard.

Under Autocracy your resource production is increased, your happiness drops, your creativity drops, crime drops, immigration and emigration drop, alignment suffers, your police stations, academies and clinics work better, your entrepreneurs will be less effective, your crew growth is higher and finally you will field more civil defenses in case of an attack.

Ruled by a group chosen through inheritance or merit, not by the people.

A plutocracy is the most efficient form of government available to you, but not necessarily the most popular. It is a good middle ground for colonies that are not stable enough to afford the freedoms of Democracy.

Under Plutocracy your private eco takes good care of your people, better than any other form of government. All other effects are neutral.

The rule most sought after by the people. However, freedom comes at a price. While your citizens will be happier and more creative, some will abuse their privileges, resulting in higher crime. As you treat your workers fairly and afford them more labor rights, industrial productivity is lower. Due to freedom of movement, your colony must provide, or people will leave in droves.

This is the best choice for well managed colonies.

Under Democracy your resource production will be lower, your happiness increases, your creativity increases, crime increases, immigration and emigration are higher, and alignment is better.