A. C. Graham saw this seventh chapter as a rather pathetic scramble to cobble together some stories pertaining to politics, the central philosophical topic of that era. (This is premised, of course, on the assumption that a later editor or editors assembled what were otherwise mostly disassembled vignettes, which does seem most likely.) Even the Daodejing is written to the political powers and is intended as an instruction on how (not-) to rule. Yet the dearth of Zhuangzian stories dealing directly with political power might in itself be instructive. We need not view the Inner Chapters of the Zhuangzi as some kind of sacrosanct holy writ to at least consider it on its own terms. Might there not be a message in his relative disinterest in the topic?
The actual title of this chapter consists of three characters that can be parsed in two ways. Ziporyn suggests the one that allows for it to address both how (not-) to rule and how to (not-) be ruled. This seems most consistent with the actual stories themselves. Most translators have "Responses to Emperors and Sovereigns"; he has "Sovereign Responses for Ruling Powers".
We thus have these two ways of coming at politics — how the politicians should behave, and how we should respond to them however they behave. But is Zhuangzi's philosophical Daoism up to the task of helping us to formulate a political strategy for things as they are in the world today? I think it is, but it requires a great deal of work, and perhaps some serious revision. But then any personal philosophy of life, if it takes Zhuangzi as its inspiration, takes a lot of work. There is nothing in Zhuangzi that allows for its being taken onboard without a great deal of personal reformulation. This is how it should be; it is consistent with his belief that since everything is constantly evolving and changing, our responses to the world need also to be ever-changing. Moreover, we are each one of us unique, just as our individual environments and times are unique. Authentic existence requires of us that we each one make our own dao by walking the life and time unique to us.
It's all well and good to tell rulers how they should rule but they rule as they wish, and not as Laozi, Zhuangzi, or the rest wish them to do, in any case. Thus, what most people take away from these documents are principles applicable to personal living. This is a good start, but if we feel a responsibility to positively change the political world in which we live, then we need to understand how our 'spirituality' can be effectively applied to our collective experience. And this requires a lot of work. No ready-made formulas are on offer.
You can check out Scott's writings on Zhuangzi here.