Protagonist Jack Holloway lives a solitary life in a wilderness of planet Zarathustra, itself "owned" by the Chartered Zarathustra Corporation (under Victor Grego), which installed basic services and colonial outposts initially, and now reaps the benefits of new discoveries, such as the valuable 'sunstones' mined by Holloway until he befriends a tiny, feline-like humanoid, nicknamed 'Little Fuzzy', and its traveling-companions. Upon discovery that the 'Fuzzies' intelligence may qualify them as a sapient species, the Company intervenes against them, on grounds that such a discovery would declare the planet a protected aboriginal zone, and deprive the Chartered Zarathustra Company of rights to the resources there. Leonard Kellogg, one of Grego's staff, kills a Fuzzy and thus provokes a court case to decide whether the Fuzzies are sapient. In the midst of the proceedings, the Terran Navy commander reveals that his people have been studying Fuzzies, and prove that Fuzzies have at least the mental capacity of a ten-year-old human child. At once, the Charter of the Zarathustra Company is invalidated, and Kellogg commits suicide in his cell.
The second book, Fuzzy Sapiens, deals with the newly 'Charterless Zarathustra Company' and its gradual cooperation with the planet's new governor to ensure control over the planet, while the Fuzzies attach themselves to individual human guardians including the Company's staff. It becomes clear that criminals are using the irregular status of the government and of the company to attack it and steal sunstones.
The third book, Fuzzy Bones by William Tuning, suggests that the remarkable demand by all Fuzzies for the ration-pack 'Extraterrestrial Type Three' (aka 'Extee 3' or 'estefee') does not coincide with the composition of Zarathustran soil. A third significant Fuzzy character is developed called Starwatcher. Little Fuzzy, Diamond, and Starwatcher become the clear leaders in working with humans.
Golden Dream fits with these three books in terms of the general plot and relationships.
After these two official sequels, the original third book by Piper himself offers an alternative future, wherein Little Fuzzy himself is separated from Jack Holloway and introduces a band of wild Fuzzies to the combined society.

Question: What effect does the unstable government have on the Fuzzies?
Answer: The Fuzzies are now bonding with and seeking human guardians.
Alternative answer: Criminals  were stealing  sunstones.