I was also curious about this question. Physicists formulate your question a littlebit handwavingly, saying that (i) the smooth tangent vector fields are infinitesimal version of smooth diffeomorphisms, and (ii) as such the Lie algebra of smooth vector fields (here denoted by $X$) "act similarly as $\mathrm{igl}(T_{p})$ at a point $p$". Point (i) is clear I guess, can be found in any diffgeo text. I tried to make some mathematically less handwaving sense of (ii). This is what I managed to formulate so far: let us fix a point $p$ of the manifold, then one can define the following subsets of $X$.
$X_{p}^{-1} := X$,
$X_{p}^{k} := \{u \in X | \text{up to } k\text{-th derivative of u vanishes at }p\}$
($k=0,1,2,...$)
where the derivative is understood to be any covariant derivation. It is seen that the definition of each $X_{p}^{k}$ is independent of the choice of that covariant derivation. They form a decreasing sequence of sub linear spaces in $X$. Moreover, one has
$[X_{p}^{k},X_{p}^{l}] \subset X_{p}^{max(-1,k+l)}$ $(k,l=-1,0,1,2,...)$
and therefore each of these subspaces are also sub Lie algebras, and are called the k-th order isotropy sub-Lie algebras within $X$ at $p$. Unfortunately, they are not normal sub Lie algebras, i.e. not Lie algebra ideals within $X$, therefore one cannot define for instance the quotient Lie algebra $X_{p}^{-1}/X_{p}^{0}$. However, all of the quotients
$\hat{X}_{p}^{k} := X_{p}^{k}/X_{p}^{k+1}$ $(k=-1,0,1,2,...)$
are meaningful as quotient linear subspaces. One has the identity
$[\hat{X}_{p}^{k},\hat{X}_{p}^{l}] \subset \hat{X}_{p}^{max(-1,k+l)}$
Therefore, one can define (I think, it is called the covering Lie algebra of $X$):
$\hat{X}_{p} := \oplus_{k=-1,0,1,2,...} \;\hat{X}_{p}^{k}$
and by construction, it shall be isomorphic (not naturally) to $X$ as Lie algebra.
That means that one can inject elements of $\hat{X}_{p}$ to $X$ homomorphically. Since
$\hat{X}_{p}^{-1} \equiv T_{p}$
and
$\hat{X}_{p}^{0} \equiv \mathrm{Lin}(T_{p}) \equiv \mathrm{gl}(T_{p})$
one has that the direct sum of the first 2 sectors of the covering Lie algebra
$\hat{X}_{p}^{-1} \oplus \hat{X}_{p}^{0}$
is isomorphic to $\mathrm{igl}(T_{p})$.
So, in this sense, one can say that elements of $\mathrm{igl}(T_{p})$ can be represented on $X$ with injective Lie algebra homomorphism, and they will end up in $\hat{X}_{p}^{-1}\oplus \hat{X}_{p}^{0}$ sector of the covering Lie algebra $\hat{X}_{p}$.
Best regards,
Andras