How the authorities handle local villains ranges widely from being hunted down and killed like the slaughterhouse nine to being tolerated like The Elite. Sometimes "villains" will be in ostensible positions of power like in South America.
The public might like villains from a distance but they'll hate confronting them face to face.
"Villain" originally meant peasant, relic of the classism of language. One can see this in the St Crispin's Day Speech: where Henry claims he will raise the soldiers from their "vile" condition to be "gentleman" when they return to England. Provided they participate in a verifiable suicide mission.
As poverty generally causes people to commit crimes when superheroes stop muggers, for example, they end up beating up poor people.
↑“I joined villains because it seemed fun and easy,” Etna said. “Everything else seemed so much harder. There’s money in being a villain. The costumes are better.”
“Ehh,” I said. I remembered Etna’s skimpy fire sorceress outfit from Hollow Point, before the weather had cooled. [...] “But it isn’t easier. It wears on you, you have to worry about being caught. People will like you from a distance because you’re cool, you’re dark, you’re edgy. Then they hate you to your face, even if they don’t talk about it because they’re afraid. I went hero and… they hate us anyway?”
“Might be because so many people chose being a villain first, because they thought it’d be easier and more fun, even if it meant stepping on the civilians along the way,” I said.
“Oof,” Etna grunted. She sounded genuinely wounded as she said, “That’s fair.”
“It’s fair but a little mean of Antares to say,” Sveta said, poking me. “She’s in a mood.” - Excerpt from From Within 16.5
↑“I used to be a supervillain,” I said. [...] “No, let’s be fair,” I said. “Being a villain’s an option.” [...] “Now you fight other villains, who want to steal the money you just got. Roll.”
“I’m a bad guy, I’m not fighting them!”
“Bad guys fight villains and heroes,” I said. “But you can give up the money if you want to run.” [...] “Okay,” I said, clapping my hands. “Villains, raise your hands.”
“If you’re dead, maimed or in jail, lower your hands.”
More than half of them did.
“Heroes, raise your hands if you’re okay.”
Most of the other kids raised their hands.
“Sophie chose to be a rogue,” Fox-mask said, “She’s been in one fight, but she came out okay.”
“You’re screwing the villains,” Ned said. “It’s not really one fight after another.” [...] “Being a villain is hard,” Mrs. Yamada said. [...] “One in twenty might make it in the long run,” I said. “If they’re lucky, if they’re good, if they have friends they can count on.”
“Pat yourself on the back a little more,” Reynard said, a little sarcastic. The girl in blue elbowed him. [...] “I’m being a little harsh,” I said, “But this is it. It sounds dumb, but being a cape means beating the odds, again and again. If you’re a villain? The reward is pretty damn good, but the risk is bigger. You saw how few villains actually survived intact. Even then, a lot of them lost their money, or got hurt.” - Excerpt from Drone 23.4
↑When a villain dies, their name is up for grabs, but if it's just taken without a second thought, then has a way of maintaining bad reps and picking up old rivalries with few of the benefits. That guy who always wanted to stomp Tailspin's ass might get some cathartic release from beating down Tailspin II. Sometimes very stupid villains take a name that's already taken, causing headaches for everyone involved, and invite beatdowns & contests over the name.
Heroes are far more likely to simply ask for permission to use a name. Unicorn III passed her name on to Unicorn IV, for example. - Wildbow on Reddit