What happens if the PCs abuse their power? This is very unlikely to happen, but PCs are often unpredictable. If a town makes a PC the duke of the town, the PC *might* attempt to execute that guy in the tavern that they don't like or something like that. If you do that, the other townspeople may fear for their lives and run away from the town or maybe even revolt against said PC!
This, obviously, is not good. Even though the PC may kill them easily, it probably will lead any survivors into leading a bigger revolt with hired (and more powerful than normal townsfolk) mercenaries, and a gigantic group of angry people. And even if he eliminates everybody in the original revolt, he still will take damage. Also, I don't think the local magician who didn't participate in the revolt (and therefore wasn't killed) will be eager to help you anytime soon.
Another thing is, his fellow party members may try to stop him. For example, the Chaotic Evil Warlock who was trying to kill the local bartender will likely meet resistance from the good alignment Cleric. This could lead to BIG trouble. The Cleric may refuse to heal the Warlock from then onwards, and as a Level 9 PC, would deal more than a little damage to him. He/she might even leave the party!
As a general rule, try not to abuse your power, with the exception being if the bartender is actually a Werewolf or something. DMs can also add interesting plot hooks if abuse of power happens.