Kino may be small, soft-spoken, and polite, but she’s also a powerful badass. As such, she knows that she must occasionally push herself as far as she can go, not only to explore her limits, but to keep her skills from getting rusty.
It’s with this in mind that Kino eagerly arrives at the “Coliseum county”, where newcomers must fight others, often to the death, in order to win their citizenship.
The eternal tournament could be called the ultimate diversion for a corrupt king trying to maintain his grasp on his little kingdom, which is rotting and falling apart at every turn. They don’t even keep the coliseum properly maintained.
All of this disrepair must be particularly distasteful to someone as obsessed with being on top her game as Kino, who is underestimated by each of her opponents but defeats them all with ease, without killing a single person.
The night before the final match, Kino tells Hermes to be near the arena so they can leave as soon as she’s done. Victory is never in doubt here, it’s only a matter of how Kino achieves it. Her finals opponent is a capable-looking fellow named Shizu, armed with a katana.
Kino lets Shizu get close enough to slash at her, but blocks his strike with guards hidden in her sleeves, and on his upswing, she trains a hidden pistol at Shizu, forcing him to concede defeat.
The crowd shouts “KILL! KILL! KILL!”, and Kino does kill…their king. Her question about spectators getting killed by stray bullets being of no consequence comes into play here, as does her homemade explosive round that explodes the king’s head, leaving no doubt that he’s gone.
As victor of the tournament, Kino gets to make a new rule for the games, and it’s this: everyone, not just newcomers, must fight each other to the death; the last person standing will be the new king. As she leaves on Hermes, the town starts tearing each other apart.
Shizu catches up with her by a lake and thanks her for killing his father; he was the prince who was cast out of the country and sought revenge, but Kino denied that revenge, taking care of the king herself. She also meets Shizu’s loyal talking dog Riku, whom I’d like to think whispered to Shizu that Kino’s a girl (her earlier “don’t call me boy” to the guards was another hint).
As for why Kino set the people of the town against one another and blew the whole thing up…I suppose a part of her didn’t like how they were exploiting misinformed newcomers looking for a verdant paradise, like the couple she and Hermes met on the road one day, and met just the woman another day (the man was killed in the tournament).
Now it’s a more fair, internalized system. Whether it makes the country a better or worse place is of little consequence; Kino is off to the next country.