Moderators regulate the community, but there is not an official way to moderate the moderators themselves..... How can this be handled in a community that doesn't have that that extra level above moderators?
The answer is quite simple: it is the stake-holders of the site that moderate the moderators.
Definitions: For the sake of this answer I will call those stake-holders or their representatives the "owner". The stake-holders are those that pay the bills, or the persons who bear legal responsibility for the site.
A site is not created spontaneously with no "owner". It is that owner that sets the boundaries and editorial direction of the site. The owner should retain the ultimate administrative privileges, and moderators - while powerful - should not be able to override the administrative accounts of the owner.
If a situation arises where a moderator has gone rogue or is failing to enforce the editorial direction then the owner takes remedial action against that moderator. What remedial action is taken is beyond the scope of this question, but the owner must always be in a position of being able to enforce the ultimate sanction - which is the removal of rights from the moderator.
What if the stake-holder has no active contribution to the site? (What if they die? Become incapacitated? It's a free hosted site and they walk away?)
In this case it is up to the moderators to self regulate. If they can't then the community will eventually devolve until it either becomes stagnant, the hosting provider shuts it down, or the law steps in.
You could argue that any n number of moderators as a group can take remedial action against a specific individual moderator, but that is making the huge assumptions that:
- the stakeholder left the moderators with sufficient powers and functionality to assert that action
- you are living in a utopian world where that group taking action hasn't themselves gone rogue
So in this situation nobody can really moderate the moderators.
Can you just set up a site with some moderators and then walk away allowing it to self-manage?
I think that due to human nature it is ultimately impossible for a community to survive forever in this state without the site devolving, so the best option is to have a fresh stakeholder assume responsibility (if possible).