"You can start with a genuine cause, but when you start taking control, making decisions and feeling authority ... that's the risk," he said in an interview with MVS radio.
Castillo is one of President Enrique Pena Nieto's closest allies and has taken on special cases since Pena Nieto was governor of Mexico state. He was appointed Wednesday by Interior Minister Miguel Angel Osorio Chong to coordinate efforts to restore peace and development in the farming-rich state, a major producer of limes, avocados and mangos. There are no specifics on how he will do that, but his appointment is seen as an admission that Michoacan Gov. Fausto Vallejo has lost control of the state.
"There has been a profound divorce between the state and society, between the institutions and society," Castillo said.
Government officials are starting to echo what critics are saying about the vigilantes, who have taken territory from the cartel with the tacit approval and even security cover of the federal government, though Osorio Chong has denied that.
The U.S. State Department said Wednesday that the warring between vigilantes and the cartel is "incredibly worrisome" and that it is "unclear if any of those actors have the community's best interests at heart."
Estanislao Beltran, spokesman for the self-defense groups, said the mission is to kick out the cartel, not become one.
"They're drug traffickers, we're farmers, we're working people," he said. "We will never permit another cartel to come into our state."
Vigilantes say they won't lay down their guns until top leaders of a powerful drug cartel are arrested, defying government orders as federal forces try to regain control in the lawless region.
This week, the government has beefed up federal police numbers, vowing to finally tame the area that has been controlled for at least three years by the quasi-religious Knights Templar. But the move comes after months of unofficial tolerance of vigilante groups that began challenging the cartel, which started in drug trafficking and expanded to extortion and economic control as the government failed to act.
So far the vigilantes have been more successful than the government, which has been sending troops to Michoacan at least since 2006, when former President Felipe Calderon launched his assault on drug trafficking.
Associated Press writer E. Eduardo Castillo in Mexico City and Luis Alonso Lugo in Washington contributed to this report.