A Dispute Resolution Organization (DRO), also called a Private Defense Agency, is a free society's answer to police without the abuse and extortion-funding. An individual may elect to defend themselves and not use an agency; but given the economic gains from specialization and economies of scale it makes sense to pay someone else, or an agency, to handle defense and the resolution of interpersonal disputes. In a free society, DROs take the place of (the defensive aspects of) police and courts, although some may specialize more in adjudication (e.g., arbitration services) and others more on, say, patrolling and property defense, and not combine the two.
It's important to understand that these agencies do not have any special rights (well, nor do police…) or privileges granted them. If they go to the wrong house, break down the door, and shoot the dog, they are liable for the damage and harm they did like any other individual, and must make restitution. They are delegated some rights from their employers, but one can only delegate rights one has. For example, an individual can allow their DRO onto their property (in fact, may contract to allow them in at any time to look for stolen property or the like), or to use necessary force against trespassers, rights they would not have as strangers.