The Collaborative International Dictionary of English v.0.48:

Democracy \De*moc"ra*cy\ (d[-e]*m[o^]k"r[.a]*s[y^]), n.; pl.
   Democracies (d[-e]*m[o^]k"r[.a]*s[i^]z). [F. d['e]mocratie,
   fr. Gr. dhmokrati`a; dh^mos the people + kratei^n to be
   strong, to rule, kra`tos strength.]
   1. Government by the people; a form of government in which
      the supreme power is retained and directly exercised by
      the people.
      [1913 Webster]

   2. Government by popular representation; a form of government
      in which the supreme power is retained by the people, but
      is indirectly exercised through a system of representation
      and delegated authority periodically renewed; a
      constitutional representative government; a republic.
      [1913 Webster]

   3. Collectively, the people, regarded as the source of
      government. --Milton.
      [1913 Webster]

   4. The principles and policy of the Democratic party, so
      called. [U.S.]
      [1913 Webster]

WordNet (r) 3.0 (2006):

democracy
    n 1: the political orientation of those who favor government by
         the people or by their elected representatives
    2: a political system in which the supreme power lies in a body
       of citizens who can elect people to represent them [syn:
       democracy, republic, commonwealth]
    3: the doctrine that the numerical majority of an organized
       group can make decisions binding on the whole group [syn:
       majority rule, democracy]