The sentence should be understood in connection with Deuteronomy 12:1–14, especially Deuteronomy 12:8, You are not to do as we do here today, each doing whatever is right in his own eyes.
The Lord in that chapter instructed his people to destroy the Canaanite places of worship and to seek the one place that the Lord chooses for worship.1 But in the time of the judges, this very instruction was ignored. Again, the Micah episode took place in the hill country of Ephraim, the very location of the true house of the Lord, at Shiloh (Judges 18:31; Judges 21:19). Israel was combining true and false worship, much like in the case of Gideon’s ephod (Judges 8:27) and the human sacrifice of Jephthah (Judges 11:30–31, Judges 11:39).
6 In those days there was no king in Israel. Everyone did what was right in his own eyes.