"Democracy" is a broad term that refers to a government run through an electoral process. The term encompasses both representative (limited republican) government, in which representatives are elected to rule on behalf of the people based on their basic philosophies, and a true democracy in which the public directly votes on issues, or in which representatives campaign on behalf of particular issues. Capitalism allows for the former - a constitutionally limited federal republic, but not the latter, which is a mob rule unlimited by constitutional principles, and abusive of individual rights.
It had been observed that a pure democracy if it were practicable would be the most perfect government. Experience had proved that no position is more false than this. The ancient democracies in which the people themselves deliberated never possessed one good feature of government. Their very character was tyranny; their figure deformity.Alexander Hamilton