Your understanding is incorrect when it comes to fiat, as is most peoples, at least in the United States that is. Fiat came about by deception, corruption, and lies. Trust by the people was never part of the equation. The US government made it illegal to possess gold at first and then slowly removed silver from the currency, the deception took over fifty years to complete but they did it. The paper money at first said it could be exchanged for gold , then after gold became illegal the paper money was called "silver certificates" and you could exchange the paper money for silver at the Federal Reserve Banks. Then the designation of being "silver certificates " was removed, but we still had coins that had silver in them, not pure silver but some silver. That eventually became a microscopic amount of silver, it was all based on deception and time. Now they say it is trust and we have "trusted" it for years and years.
If you tell a lie long enough and often enough over time the people will believe the lie as being truth, that is exactly what has happened in the USA, I'm not sure about other countries but I suspect something similar has taken place as well since the same people run the central banks around the world. We are slaves as you stated, most people are to ignorant to realize it though, the governments are real good at causing distractions that keep the masses occupied with trivial crap and such so the masses don't ever stop and take the time to figure out and understand what has taken place. Since the US dollar was taken off the gold standard the dollar has lost 97% of its value, that should be a major wake up call, but the people aren't hearing it because they are running around with earbuds and cell phones in the ears and hands. It was a well planned and executed enslavement of the people for sure.