Becoming department chair while being good friends with some but not all members I am considering becoming department chair of a small department (10 people, not including adjuncts), and not because I really want to, but because no one else wants to and I like to be a good member of the department in terms of service.

Here’s my concern.  I am close (platonic) friends with a couple of adjuncts in our department - I hang out with them socially outside of work, and just chat about personal things like my mental health.  In my current position, I have no supervisory role over their positions. But I am worried that once I become chair - and so I will become their supervisor - the power differential will affect the friendship - I would no longer be so comfortable being so emotionally open (and perhaps I never should have been so open with coworkers in the first place, but I never envisioned becoming chair, also I have had trouble making friends outside of work). Also, it would be very hard for me to not give a favorable preference to my friends in e.g choice teaching assignments, raises, etc. And that if some other faculty members see that we hang out outside of work (e.g. through Facebook posts), etc they may feel I favor my friends for teaching assignments and so on. And they would be right. 

Any advice? Am I over thinking this and being too cautious or careful?
Should I tell the current chair that I have changed my mind and no longer wish to be chair?
You should expect some professional distance between yourself and anyone you supervise. You can be "friendly" of course, and you can interact at departmental social functions in a friendly way, but you have to recognize that whenever a dispute arises you are the boss, not the pal. 

Some departments, however, with a long history of very collegial relationships, mutually supporting in every way, these sorts of things are unlikely to arise. This is especially true if lots of things are decided by committee or by consensus, rather than by fiat. In such a place your fears would likely be misplaced, until something unexpected happens. 

There are places, very collegial, in which the department head position rotates among the tenured faculty, with the job lasting a couple of years or so and then passing on to someone else. If a place has such a history, then it seems to change the dynamics a bit. The 'head' is an administrator but is seldom called on to be an 'ogre'. Note that such things as tenure are normally handled by committee, rather than by the head, but annual salary adjustments might fall under your control. 

The more the position calls on you to be a personnel manager, the more likely it is that conflicts can arise and the less likely it is that you can be "just a friend" to other faculty. 

If you already have graduate students under you and are responsible for their future, you can get a small sense of what the relationship might be like. You can be friendly, but you need to keep a certain professional distance so that your authority is recognized when it is necessary for it to be recognized. Hopefully not often, but it happens.