The very short answer is that world of Sugar Rush isn't a fully formed society that has grown and evolved over time. It's basically a snapshot of a community that was created by its in-universe writers as the setting for a series of races that take place within a small (and ill-defined) society presided over by a Princess. In short, there never was a real King Candy since the society was birthed, fully-formed with Princess Vanellope as its absolute ruler.
Q. Was King Candy an existing character in the game, or did Turbo create him from scratch?
Raymond S. Persi: Good question. I think King Candy didn’t exist before Turbo got there. That’s why Vanellope was on the side and the ruler of the world.
Q. is that answer regarding King Candy 100% canon or just your own personal theory?
Raymond S. Persi: That’s what we were going for. Turbo snuck into Sugar Rush, created a new persona in the form of King Candy and reprogrammed everyone to think he had always been around.