From the sound of it, it seems likely the mandatory dance may have been a misguided attempt at forcing residents to engage in a social activity with each other rather than a simple exercise of authority. Think of it like a team-building exercise or mandatory meeting. Unnecessary as it is in this situation, I can't see the logic in abusing power in such a way unless it was intended to provide some sort of benefit for the residents.

Of course, "benefit" is subjective and things are always different in practice than they are in theory.

The reason I think this is because complacency is what a government would ultimately want. I can't see the sense in riling a ragtag society for no reason unless there's perceived prejudice against us. Even then, it would be easier to control us by trying to calm us than it would be by tormenting us.

There's a possibility they're trying to maintain control while something else is interfering. Infighting among government institutions is also a possibility because we have no idea what they're like -- but as you said, assembling proof would prove difficult.