The Big Bad Wolf of this text is without doubt the British tyrants who rule over the thirteen original American colonies. And the one who's responsible for the most damage to American life is none other than the King of England. For Paine, there is no king that Americans should ever trust, because a king ain't elected by the people.
For this reason, he claims that "… the king is not to be trusted without being looked after, or in other words, that a thirst for absolute power is the natural disease of monarchy." (1.17)
In other words, an unelected king will always want to abuse his power because he has no reason not to.
Paine isn't just against the idea of a British king; he's against the entire British political system because he thinks it makes absolutely no sense. Why would the British have a king appointed by God and have to then elect a group of normal people (The Commons) to keep the king's power in check? Also, what's the deal with the House of Lords, which contains a bunch of English aristocrats who are born into power just like the king?
In the end, Paine can only conclude that "the prejudice of Englishmen in favour of their own government by king, lords, and commons, arises as much or more from national pride than reason." (1.24)
In other words, they hold onto their nonsensical political system simply for tradition's sake and not because there's any reason behind it.
Finally, Paine argues that there is no way that Britain has America's best interests in mind. If anything, Britain will exploit America as much as it possibly can so that all of the land's riches can be funneled back to Jolly Ol' England.
Paine makes this claim by saying: "America is only a secondary object in the system of British politics, England consults the good of this country, no farther than it answers her own purpose." (3.36)
So just in case we weren't sure, America is totally doomed unless it gets out from under Britain's thumb. Luckily for Paine, this is exactly what happens.