I was getting several people, including myself, confused over this issue in the thread on the welfare state. The major question there was; if someone hoards stuff they don't need or refuses to share their resources, what would be done about it in anarchist society? It's difficult trying to think of a world with absolutely no authority whatsoever, in the case of people hoarding, no-one would have any authority to tell anyone to give some of the stuff back. Conversely, no-one whould have the authority to prevent me and my mates picking up some blunt instruments and smashing his house up until he voluntarily became more 'community-minded'. It's easy to see that a world with no rules or enforcers might eventually collapse into a series of violent dictatorships.
The use of councils, as described so eloquently above, seems like an excellent way of preventing this from happening. Pure, total, no-holds- barred anarchy is a fun ideal to cling to but too often it doesn't have a great deal of logic behind it; almost anybody would say that society needs at least some rules, ie don't kill anybody, don't use unnecessary violence, stictly no morris dancing, etc. If you think about it, there isn't much wrong the with the general concept of rules, but they need to be designed and implemented by the people they serve.
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(Pardon my greek) 
I think this is a major point of disagreement between social and individualist anarchists, although I want to address your questions about the make-up of councils first.
The idea of a council is one at which all people will be able to attend and which would be only consituted by those people. This doesn't mean that everyone has to be present for it to make a decision, or that people would be forced to go to it, but that it'd be open to anyone in the community and would be made up by those who turned up. Presumably people would notify in advance if they wanted to discuss specific things at meetings, so you'd have various make-ups at different times depending on what was being discussed.
Decisions would have to be made by majority vote or consensus (although I've been in situations where consensus has been used to make a decision and it's a nightmare, I'd rather be in a minority occasionally than constantly in a vetoed majority), and people could then be delegated to carry out the decision taken by the council - either to communicate to another council, or do whatever needed to be done in the community.
So you could argue that there's a hierarchy of the community over the individual, but I don't see that you could have any kind of effective organised society without public decision making. Otherwise you have (usually American, big-L) Libertarianism - everything decided by markets, or consensus, which can lead to endless intractable positions where you either get a solution that no-one likes, or no solution at all, or unanimous decisions that could equally have been taken by majority vote.
The idea that the majority will have some kind of hierarchy over the minority (1, 5, 50 people), presupposes that that minority is a fixed group of people - with different issues and decisions you'd have constantly changing groups of people for and against different proposals - that is unless your community was divided into intractable factions, in which case you're looking at something resembling pre-capitalist clan/tribal politics, not rational decision-making. There's also the constant ability of that minority to argue against the decision and try to change the minds of the majority - no five year terms, no full time administrators etc. Assuming all people are equal in whatever public decision making body you have (assume community council), there's no individual hierarchy. There's lots of disagreement as to whether majority decision making constitutes "rule" or "hierarchy" or "authority", I'm now very much in favour of it, but wasn't for quite a long time.
Quite a lot of anarchists agree that current technological production could be adapted to meet most needs, so if someone was to "take as much as they want, when they want", they'd only be doing what everyone else was doing. If someone was to hoard stuff they couldn't use themselves and deny it from others who needed it in the community, that'd be a bit different and the community could simply deny them any more stuff until they re-distributed it if it was perceived as a problem. Individuals or the community as whole would be able to withold their labour just as they do now. Society currently supports millions of people who don't do any productive work, despite wage-labour predominating as a means for getting hold of goods and services, so there's no reason non-workers couldn't be equally supported when the only work there was any need for was productive. Hopefully enough education would have taken place debunking current models of production and consumption that people wouldn't feel the need to hoard or to exploit others in order to live comfortably.