Censorship as Localization

When is it necessary?  When is it overdone? 

Try to find some examples where the localizers may have overstepped a line. What kind of controversy/problems arose from this? How do you define fan service, and is it an essential aspect of the anime commodity for domestic/global audiences? 
Also, consider the following issues:

How does this relate to Otaku culture? What kind of backlash might it trigger, both from within and outside the anime viewership?

What does all of this indicate when considering future anime productions, which may increasingly need to consider global audiences? 


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