State of California, Inc.
It is a corporation and not a sovereign government.
The people in California are classified as United States citizens.
They do not have a political status as an American state national, Californian, or a California citizen, an employee of the state government.
Gavin would have to repudiate United States citizenship for everyone living in California and turn them into California state citizens.
He can't do that on his own. It's illegal to change someone's national identity or citizenship without their express agreement.
If the people of California change their status to American state nationals, Californians, then the corporate government, State of California, Inc. loses power over them.