Scale and impact -- banning people from international tic-tac-toe monopoly is not a big deal, unless participation is socially or otherwise required.

Why is it right if I have 500 users but wrong if I have 1 million users?

Well, it is not necessarily right if you have 500 users, but I would call it dictatorial rather than orwellian. And it could certainly be a benevolent dictatorship with the right dictator.

The problem with the 1,000,000 users is it becomes harder and harder to have informed people make reasoned decisions based on good information, so you end up relying on processes and proxies. Data and reports. And then you create rules like "whenever data point X reaches threshold Y action Z will be taken". And it is a good rule. Not a perfect rule, because perfect rules are really really hard. And maybe the rule can be gamed a bit. Griefed a bit. And this makes people unhappy and they start complaining, but there are so many of them and they were the ones breaking the rules anyway, and there really isn't time to look into all these complaints, and its impossible to figure out exactly what happened without reading through terabytes of logs so the rules are the rules and people just need to follow them. And so what if they just got a life ban because of a momentary lapse of reason or because an organized group filed a series of false complaints. Life is too short to coddle whiners and toxic people.

And then you are orwellian.