Since you said "short story" I guess you're thinking of the original novelette-length version of "Monument" by Lloyd Biggle, Jr., which is available at www.baen.com. (Any of these covers look familiar?) The novelette was part of the answer to this old question. It was later expanded into a novel of the same title which is the subject of a Wikipedia article and another old question on this site.
Spaceship crashes on beautiful, remote planet.
As usual he was lost, and he wandered aimlessly through space for a month, conserving his fuel and nursing his worn engines. This planet had seemed his best chance, and it was almost his last chance because a faulty fuel gauge misled him, and he ran out of fuel and crashed on landing.
The pilot survives and lives quite well on the beautiful "island paradise" world amongst friendly, good-natured people...
The natives made him welcome. He became a hero by turning his flaming pistol on a large species of bird that sometimes preyed on children. He used up all of his magazines, but he rendered the bird extinct. He explored the lone continent, and found deposits of coal and some metals—insignificant, but enough to lead the natives immediately into a bronze age. Then he turned to the sea, gave the canoes outriggers and sails, and continued his exploring.
By that time he had lost interest in being rescued. He was the Langri. He had his wives and his children. His village was growing. He could have been the Elder at a relatively young age, but the idea of him, an alien, ruling these people seemed repugnant to him. His refusal enhanced the natives' respect for him. He was happy.
but, one day (while relaxing in a hammock near a beach) he "realized he was dying"
It came to O'Brien quite suddenly that he was dying.
He was lying in a sturdy, woven-vine hammock, almost within reach of the flying spray where the waves broke in on the point.
(actually, that he would eventually die, then being unable to help the people he had come to love).
O'Brien had enjoyed a good life. He knew he had lived far beyond the years that would have been his in the crazed rush of a civilized land. But he was dying, and the great dream that had grown until it shaped his life among these people was beyond his reach.
He fears future "discovery" of his adopted world and the inevitable plundering of the resources and people by "developers"...
It was a beautiful world. Its beaches were smooth and sandy, its waters were warm, its climate admirable. To the people of the myriads of harsh worlds whose natural riches attracted large populations, dry worlds, barren worlds, airless worlds, it would be a paradise. Those who could leave their bleak atmosphere domes, or underground caverns, or sand-blown villages for a few days in this sweet-smelling, oxygen-rich atmosphere could face their lives with renewed courage.
Luxury hotels would line the beaches. Lesser hotels, boarding houses, cottages would press back into the forest. Millionaires would indulge in spirited bidding for choice stretches of beach on which to locate their mansions. The beaches would be choked with vacationers. Ships would offer relaxing sea cruises. Undersea craft would introduce the vacationers to the fantastically rich marine life. Crowded wharves would harbor fishing boats for hire. Industries would grow up to supply the tourists. It would be a year-round business because the climate was delightful the year around.—A multi-billion credit business.
The natives, of course, would be crowded out. Exterminated. There were laws to protect the natives, and an impressive colonial bureau to enforce them, but O'Brien knew too well how such laws worked. The little freebooter who tried to pick up a few quick credits received a stiff fine and a prison term. The big-money operators incorporated, applied for charters, and indulged in a little good-natured bribery. Then they went after their spoils under the protection of the very laws that were supposed to protect the natives.
And a century or two later scholars would be bemoaning the loss of the indigenous population. "They had a splendid civilization. It's a pity. It really is."
so he devises... "a plan" "convinced island elders to support his plan"
The Elder turned a grave face on O'Brien. "Cannot the Langri prevent this thing?"
"The Langri can prevent it," O'Brien said, "if the men from the sky come this day or the next. If they delay longer, the Langri cannot prevent it, because the Langri is dying."
"Now I understand. The Langri must show us the way."
"The way is strange and difficult."
"We shall do what we must do."
O'Brien shook his head. "The way is difficult. Our people may not be able to follow, or the path the Langri chooses may be the wrong one."
"What does the Langri require?"
O'Brien stood up. "Send the young men to me, four hands at a time. I will choose the ones I need."
"his students taught others"
He looked at the saddened faces of the men about him. "Friends . . ." he said. And then, in a tongue that was strange to them, he whispered, "before God—before my God and theirs—I have done my best."
The fire of death leaped high on the beach that night, and the choked silence of mourning gripped the villages. The next day the hundred young men moved back to their village in the forest to grapple doubtfully with the heritage the Langri had left to them.
"achieved 80% literacy... a remarkable feat" "established world government" "successfully argued for independent status"
"When the constitution is approved," Fornri went on, "we shall elect a government. Then we shall apply for membership in the Galactic Federation of Independent Worlds."
"Is it legal?" Protz demanded.
"It is legal," Fornri said. "Our attorney had advised us. The main requirement is fifty per cent literacy. We have over ninety per cent literacy. We could have done it much sooner, you see, but we did not know that we needed only fifty per cent."
"established 100% taxation rate"
If the elected representatives of the people of Langri wished to impose an annual property tax equal to ten times the property's assessed valuation, that was their legal right. It was Wembling's misfortune that he owned the only property on the planet which had an assessed valuation worth recording. Ten times the worth of a grass hut was a negligible value above zero. Ten times the worth of Wembling's hotels amounted to ruin.
"finished resort buildings converted to school"
It left him a choice of not paying and being ruined, or paying and being much more severely ruined, and he chose not to pay. The government confiscated his property for nonpayment of taxes, and the Langri situation was resolved to the satisfaction of all but Wembling and his backers. Hotel Langri was to become a school and university for the native children. The offices of government would occupy one of the other hotels. The natives were undecided as to what to do with the third, but Dillinger was certain they would use it wisely.
"developer hired to build resort in isolated area"
As for Wembling, he was now an employee of the people of Langri. Even the natives admired the way he got things done, and there were islands, many islands, it turned out, far out in the sea where happy vacationers would not interfere with the natives' fishing grounds. Would Mr. Wembling, Fornri asked, like to build hotels on those islands and run them for the Government of Langri? Mr. Wembling would. Mr. Wembling did, in fact, wonder why he had not thought of that in the first place. He negotiated a contract wih the natives' attorney, moved his men to the islands, and enthusiastically began planning a whole series of hotels.