Commenting upon the first line, D.C. Lau states that this is "a famous but obscure line" and explains it in a footnote: "a small fish can be spoiled simply by being handled". It is difficult to understand what is the connection between handle a small fish and governing a kingdom. Perhaps D.C. Lau intended to say that ruler shouldn't mingle with the affairs of the kingdom in order to be a good ruler. But isn't it weird to preach a non intervention of a ruler in the affairs of his kingdom?

If we take into consideration the phrase "Let the kingdom be governed according to the tao." we finally understand the significance of the first obscure line. When the Kingdom is governed according to the tao, the act of governing is a very simple matter, like when we cook a small fish!

Indeed this is the explanation of the first line. The ruler has nothing to do (wu-wei) but following the tao, and everything follow the right path - way.