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One word "1984" and YOU are big brother!
Your "YOU are big brother" is spot on!
However, this covers a lot broader territory than the label suggests. Whether the state is called corporatist nationalist (a la Mussolini), nationalist socialist (Nazi Germany, Stalinist Russia and their imitators), people's democratic or a people’s republic , or some sort of progressive scientifically justified dystopia, it boils down to the same essentials, and it can happen to any unwary race with the right sets of bhavioarl relations.
The peope lack economic freedom, and therefore directly or indirectly lack any leverage to have a say in their future. Private ownership is nominal - real ownership lies with those who control the state. They turn that power to their own great purposes, whichever they may be - military strength, monumental public works and wonders, bread and circuses, or extravagant excesses for the elite - or typically, for humans at least, some indulgent combination of all of these.
The rest of the population is held under tight security in legal bondage unable to walk away. In their servile role, like slaves, they do just enough work to escape punishment. Discontent is quelled (and the malus kept to only -5) by some combination of ideological indoctrination in some cases and increasingly severe coercion for others. Independent thought, enterprise, and generally anything "rocking the boat" is dangerous and does not flower for long. Waste and "Corruption" will include some bribes, but far more simple graft, self-dealing, and direct (legal or illegal) abuse of power. War is a natural recourse to unite the people in common fervor against the enemy.