A convoy of pick-up trucks carrying more than 100 armed civilians descended on the small town of Nueva Italia in Michoacan, a largely rural state in south-west Mexico, this week. Equipped with bulletproof vests and automatic weapons, the group surrounded the main plaza and eventually took control of the town, exchanging fire with gunmen and local police they accused of representing The Knights Templar, an organised crime syndicate that has become a de facto authority in much of the state.

“They shot at us from two locations and the clash lasted around an hour and a half,” Jaime Ortiz, a 47-year-old farmer belonging to the militia, told the French news agency AFP, claiming that two of his comrades were wounded in the confrontation.

The militia, which describes itself as a “self-defence” group trying to protect citizens from The Knights Templar, has been advancing through southern Michoacan for several weeks en route to the city of Apatzingan, believed to be the stronghold of the syndicate. Members of the militia, which currently occupies more than a dozen towns throughout the state, have fought gun battles with local police officers whom, along with state governor Fausto Vallejo Figueroa, they accuse of protecting the gang.

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One resident of the state, who did not wish to be named, told The Independent: “I would say the authorities in Michoacan have long lost the right to claim they are protecting their citizens. I don’t like to see people picking up arms, I deplore violence; but we have very little confidence in the police forces under the control of the Michoacan government.”

The country’s Interior Minister, Miguel Angel Osorio Chong, has demanded that the militia disarms and withdraws from the area. He announced the deployment of additional forces to the region, including the Federal Police and military personnel, to temporarily replace local and state police.

But Hipolito Mora, one of its leaders, said the group has no intention of disarming, and the movement would continue until leading members of The Knights Templar and their accomplices were arrested. On Tuesday, federal forces entered Apatzingan and maintain a military presence there. The Knights Templar, reportedly led by a man named Servando Gomez Martinez, aka “La Tuta”, emerged in 2010 after a split within a paramilitary defence group-turned-organised crime syndicate known as The Michoacan Family. The group participates in dozens of illicit activities from drug trafficking to illegal mining. The state has been gripped by armed conflict and a military presence ever since. Nearly 1,000 people were murdered in Michoacan in 2013.

Civilian defence groups have been common in Michoacan for years. Some of the groups hail from semi-autonomous indigenous communities, many of which have long maintained their own police forces. Others operate without the permission of local governments. Some speculate whether the self-defence alliance in Michoacan has been infiltrated by the Jalisco New Generation Cartel, a rival of The Knights Templar.

Michoacan has long been wracked by corruption scandals and accusations of official complicity with organised crime. Ahead of local elections in 2011, as many as 50 candidates across the state withdrew because of threats.

The recent confrontations are the latest flashpoints in Mexico’s so-called “drug war”, an armed struggle between rival criminal groups and security forces that began in the 1990s and intensified after former president Felipe Calderon launched a military crackdown in 2007.

Enrique Pena Nieto, of the Institutional Revolutionary Party, took office in December 2012 and promised a more streamlined, intelligence-based approach to fighting crime. Nevertheless, in 2013, Mexico saw over 17,000 murders, a figure roughly in line with the murder rate under Calderon and twice the rate under Calderon’s predecessor, Vicente Fox.

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Dr Edgardo Buscaglia, president of the Citizens’ Action Institute in Mexico, who has studied the proliferation of armed groups in the country, believes that the confrontations in Michoacan are a consequence of the institutional vacuums that have permitted corruption and organised crime to flourish.

“I have no doubt that some of the community defence groups you see in Michoacan are legitimate,” he told The Independent. “But you also have groups financed by businesspeople, groups financed by municipal governments, and groups funded by rival criminal organisations.

“There are pockets of Mexico that resemble a failed state, and Michoacan is one of them,” he added. “Sending the armed forces to tackle a problem that is fundamentally caused by corruption and the lack of reliable public institutions is counterproductive. You have a weak and fragmented state in Mexico that does not have the institutional capacity to root out corruption, or provide security.”

One of the principal leaders of the self-defence movement in Michoacan, Dr Jose Manuel Mireles, a medical doctor from the town of Tepalcatepec, was rushed to hospital on Saturday after the light aircraft he was travelling in was forced to make an emergency landing, killing one passenger and injuring four others.

It has not yet been confirmed if the incident was an attempt on his life. He is expected to make a full recovery.