Difference of theory then. I don't believe "neighbor"-ness has anything to do with governance, because I highly doubt anyone knows more than a fraction of the people even within their own neighborhood, let along any meaningful jurisdiction.
I honestly do trust the federal government more than the state or county or local governments, precisely because it's bigger and unwieldy. I know for a fact that my city and county governments do things that are blatantly illegal, let alone the rampant corruption at the state government level, because nobody pays attention to them. The federal government dominates all reportage and public attention, so all of its actions are under much great scrutiny. Obviously nothing is perfect, all things being a continuum and not absolutes, but it's pretty much a demonstrable fact that the federal government is less corrupt now than it was, say a hundred years ago, because of the greater information flow and public access.
But in more theoretical terms, I trust the policies made by a larger representative-constituency more than a smaller one: the smaller the electorate, the more homogeneous it becomes. And the more homogeneous it is, the more likely and acceptable it is for the government to make policies that punish people who don't fit the majority model.