I get what are you saying. Looking from your perspective as a person born and raised in a free world it make sense. To enforce the law you need to display the force on streets. But in a totalitarian society you don't need to do that. You can just tell people "Don't go in the night outside because the patrols will catch you and you are going to be punished." And people will obey, because that is what they were doing all their life: listening to their superiors.
If you are told all your life what to do, what to think, what not to do, then the prison don't need to be physical. Is in your head. It will populate the night streets with patrolmen, even if they don't exists.