Democracy is many things. It's a form of government, a system of institutions, a decision procedure, a series of activities, along with much else. At a deeper level, though, democracy is the ideal of self-government among equals. In a democracy, the people are not mere subjects of the government. They are equal participants in government. They are citizens.
Understood in this way, democracy responds to a moral problem. Government in any form exercises power over those it governs. In a democracy, this power is shared among equals who disagree over how power should be used. Accordingly, when democracy enacts policy, some citizens are forced to comply. Thus, the problem: how can one be subjected to political power without thereby being subordinated by it?
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