Trade-offs inevitably have to be made between “the will of the people,” and what is practical or desirable. This is a principle much broader than the issue of Iraq and the American occupation there.
Obviously, most people would vote “yes” to lower taxes. Very likely, many of the same people would also vote “yes” to greater government services, at least for themselves. Is democracy thereby thwarted? In the classic sense, probably yes (of course, ancient Athens wouldn’t today be recognized as a democracy given the issue of slaves, women, etc.), although I admit my ignorance of Swiss politics and if anybody could manage it, it would be them.
The occupation raises another issue: is it "democratic’ for major decisions about our lives to be imposed upon us, by people we have no control over? The U.S. president is elected by Americans, but affects the world. Is that fair? For that matter, we could say the same about Microsoft. (Is Socialism necessary for democracy, or would this do irreparable harm to language?)
A major issue of democracies is that of demarcating the boundaries of the electorate. For example, consider the Tibet issue. If Jesus comes back and decides to resolve the Tibet issue democratically, who gets to vote? Only Tibetans? Tibetans plus Chinese living in Tibet? All Chinese? Other interested parties? Everybody? I don’t see how Jesus could possibly decide the issue on principle. Is it “democratic” for a less populous group to be forcibly absorbed by a more populous one which can always outvote them? Or would it be better to entrench minority rights, even if that results in a “dictatorship” by privileged minorities? Not infrequently, political entities frame political boundaries with the intention of producing the result they desire. In Iraq, for example, various political parties want the country to be a unitary state; divided into three multi-province regions; divided into five multi-province regions; or partitioned outright.