This chapter is one of the places where the doctrine of wu wei, acting without acting, is most likely to be misread, and it is worth setting out what it does not say.
It does not say that a ruler should do nothing. The sage of this chapter discards three things, which is an action, and the chapters around it have him governing, warring reluctantly, feeding people and holding a state together. Chapter three has him ordering a society, chapter fifty-seven has him governing by not meddling and getting results he clearly wanted, and chapter sixty compares governing a large state to cooking a small fish, which is an activity with a technique.
Nor does it say that the world will improve if left alone. The chapter makes no promise about outcomes at all. It says that a particular relation to the world, that of grasping and working on it, destroys the thing it is applied to.
The distinction the text is drawing is between acting on and acting with. What is prohibited is the stance of an artisan facing raw material, which assumes the material has no direction of its own. What is recommended is the stance of a person joining something already in motion, which is why so many of the book's images are of water, weather, growth and traffic: things that are going somewhere without you.
The vocabulary here supports that. The verb translated act on carries a sense of working, making and contriving, and its negation in this book is not inactivity but the absence of contrivance.