The purpose of a democracy is to enable the people to protect themselves from the state by choosing their representatives. In a sense democracy is similar to anarchy in that there is no outright leader and people rule themselves by voting. If everyone is perfectly represented then this provides the most freedom. If people vote directly on laws (as in a referendum) then in effect there is no state because there is nothing between the people and the laws.
It is only if there is a body of people who stand in the way of the people that there is a state in the truest sense.
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