Duck or dragon, through the Veil, Simpson, young goat, all for sale.
Francis Drake (Drake meaning male duck as well as draconic monster), William Death (through the veil meaning death), Otway Burns (Mr. Burns from the Simpsons animated sitcom), and Captain Kidd (kid being a young goat) were all privateers, ship captains hired by governments for use in war.
When you take away two of my letters you make me a pawn for my betters.
Private (er), bottom level military rank.
But take just one, if you please to make a villain of the seas.
Pirate (missing a v), a seaborn raider. OP added that a Letter of Marque was needed to make privateering legal. Without one, you're a mere pirate.
Some say I'm a thief, they lie; All's fair in war - but who am I?
Though privateers would often plunder their targets, they were not pirates because their actions were sanctioned by governments. It's war, so they merely take their spoils.