This is almost EXACTLY what happened in Peru during the late 1980s and early 90s - rise of the rondas campesinas. The Shining Path was based in the highlands and peripheral areas, forcing the people to support them through intimidation; the military fought back but was either ineffective or (frequently) slaughtered the campesinos as collaborators.
The people took to arms and attempted to defend themselves. It ended fairly well for most of the campesinos.
Now granted, this might be a much more multi-faceted conflict, as we don't have one party declaring a xenophobic war of blood and fire against the population, but multiple drug cartels and gangs striking out, and very-likely-complicit actors within the state.
professor orin starn of duke has a great book on the topic, "nightwatch"