v1-6: This incident, and those that follow, indicate the corruption of true religion that continued throughout the period of the Judges. v6, and 21.25, refer to each one doing what he saw fit, or doing what was right in their own eyes. The enemies during these chapters were from within, not outside.
After the hedonism of chapters 10 to 16, this is a period of anarchy, with each one doing what he pleased.
v3: The woman had set apart 1100 shekels of silver to make a carved image. When people do what is right in their own eyes, they do not subject their actions and plans to the Law of God.
v4: The silver was evidently not wholly dedicated, since the woman only took 200 shekels to the silversmith.
v5: Micah, ignorant of the ways of God, installed one of his sons as priest.
v6: Individuality was a recipe for disaster, as it is today. This attitude did not prevail throughout the period of the Judges, but during the later years. It seems the incident was typical of events in Israel for many years.
v10: The wandering Levite had arrived at Micah's house. This was Micah's opportunity to have a 'proper priest'. Micah, quite rightly, provided for the Levite. Yet physical provision was preferred above spiritual principle.
v11: The Levite agreed to remain in the place of idolatry. The tabernacle remained the place of worship, and a Levite should be expected to encourage people to go there, but this Levite failed to do so. Again, it seems likely that he was not the only one who had followed compromise.
v12-13: Ritualism; the belief that the presence of a Levite would automatically ensure God's blessing. Centuries later, in Is 1.11, a similar attitude prevailed. The following of a ritual does not secure God's blessing. Rather there has to be real faith and real obedience.