Nah, it's pretty much feudal. The dwarves work in exchange for protection and payment in the form of a portion of goods and services produced provided by their lords; when the economy kicks in, it's a little more capitalist but still more or less similar to 14th and 15th century feudal systems.
I disagree. If by "lords" you mean the nobles, the only thing dwarves get from the nobles is Not A Hammering if they follow production orders. You could argue that the player is the lord, since (s)he controls the military and the production orders, but I don't think that's the case at all. If you try to assign a role to the player, (s)he seems more like an ant queen than anything. Think about it: without the player, all dwarves would do is run away from hostile creatures and quickly starve to death, having no way to get more food.
If you consider the player, there really is no conventional government that applies to Dwarf Fortress. Considering the player, I think an ant colony really is the best way to describe it: one single being completely controls the actions of a number of others, who have little to no free will. Of course, that's incredibly simplified from both the concepts of an ant colony and a fort, but the basic principle still applies.
If you take the player directly out of the mix, I think an early fort is a commune and a larger fort is a tribe. The economy is never really capitalist, as stated, and the dwarves do continue to work together on every task.
Off-topic: Does anyone else find it interesting that dwarves are always completely honest about their crimes, to the point where dwarven society doesn't even require crime investigation? I realize that this is because Toady hasn't put in crime investigation and lying yet, but as a concept it's interesting to me.