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In my opinion, this is because a democracy thrives on the free flow of information. The people need to know as much as they can about their government and the issues that face their society. If they do not have this information, they cannot truly exercise control over the government in the way that democracy demands.
At the heart of democracy is the idea that the people control their government. In order to do this, they have to know what problems exist in their society and they have to know what is going on in the government. If they do not know what problems exist, they cannot push the government to fix the problems (imagine if we didn't know what the deficit was). If they do not know what is going on in government, they could not punish governmental officials who act in ways they do not like. Both of these would be terrible for democracy.
So a free press is necessary to democracy because it allows the people to find out the things they need to know in order to control the government the way they are supposed to.
To answer this, merely look at countries where there is no free press, and it is run by the government. They are all dictatorships, so one could argue that a free press is at least an indicator of a democracy, and at most, essential to one.
One of the reasons a free press was first established was so that government would be subject to comment and criticism from the public without fear of retribution. And because a democratic election might cost government officials their jobs, they become more responsive to the public because of a free press.
One of the first things that Napoleon Bonaparte did when he conquered a country was to have the newspapers put under his control. In this way, the newly conquered people would be told only of his greatness and the benefits of France's colonization.
The old adage that "knowledge is power" is so true. As the other posters have mentioned, people must know the truth of what is occurring in their country in order to effect change.
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