Whatever the first sentence of this chapter may mean, it is oddly expressed.
[paragraph continues] One should govern a country as one would fry small fish, and we have added the traditional explanation in brackets, "neither gut nor scale them," which means the same as the rule wei wu wei, i. e., do the not-doing, practice non-practice; leave them alone and do not meddle with their affairs.
In ancient times ghosts were feared, and ghosts begin to spook, or at least are believed to spook, where crimes keep the minds of the people in a state of fearful and unsettled expectancy. See Chapter 57.