There are many elements of overlap and similarity between democracy and communism, as well as some fundamental differences. The idea of popular self-governance and little or no division between the people's will and that of the state are common to both theories. Because democracy is a political system and communism is primarily an economic system, they can coexist within a given society or nation. A democratic political system is more likely, however, to have a capitalist economic system.

While there are many types of democracy, the underlying principle is popular self-government. The roots of democracy go back to ancient Greece, where it existed in a limited form. The idea that the people, or demos, should lead their own society was established in Athens in the sixth century BCE. In greater Europe, some principles of representational government had gained hold by the Middle Ages; numerous countries introduced democratic institutions such as England’s Parliament, which began in the thirteenth century to coexist with the central authority vested in a monarchy. As ideas expanded greatly during the seventeenth and eighteenth centuries, they sometimes coincided with the temporary abolition of monarchy, as in England in the 1650s under Oliver Cromwell. Enlightenment philosophies that posited an association between rights and human nature become popular. These ideas became the cornerstones of the political philosophies put into play when the thirteen colonies of North America rejected the colonial, monarchical rule of the English. Although there was debate in the early days of the American republic about instituting a monarchy, it was rejected in favor of representative democracy with limited central authority, called the executive branch.

Contemporary representative democracies take numerous forms. The elected bodies at the state level may consist of one body or chamber (a unicameral system) or two chambers (bicameral). The US Congress is an example of the latter. In a parliamentary system such as that used in Britain, the prime minister is always of the majority party that controls Parliament. In the US system and others like it, the president is elected separately and is often of a different party from the majority that holds one or both houses of Congress. Some countries that have single-party systems are technically democracies in that they have elected representatives; in practice, however, the head of state has much more power.

Communism is primarily associated with the theories of Karl Marx and other nineteenth-century philosophers, in part as Marx and Friedrich Engels presented it in The Communist Manifesto (1848). The first modern nation to use a communist system was the Soviet Union, beginning with the 1917 revolution. However, a major element of Marx’s theory was what he called "primitive communism," a very early economic system which he argued had been utilized by hunting-and-gathering societies in which all members pooled their resources. In that respect, communism can be said to predate democracy.

The political dimensions of communism intersect with its economic dimensions. One of the primary principles of the system is that class divisions are eliminated from society in order to allow everyone to act out of shared interests. The economic aspect of this idea is that everyone also shares in ownership of productive systems. In theory, communist economic systems can coincide with democratic governance because the people elect their own representatives. In practice, the Soviet Union and other countries that converted to a communist economic system became single-party democracies in which the Communist Party was synonymous with the state. Because of this, the political apparatus of the Soviet Union and Soviet bloc countries often failed to represent popular interests and tended to support repressive, even totalitarian regimes. For that reason, political historians often conclude that true communism, according to Marx's precepts, has never been implemented in the modern world.

The differences between communism and democracy are discernible through both linguistic and historical lenses. First, communism's root word is communis (Latin for "common"); it is named for the fact that, in a communist system, the ownership of production is held in common by the workers. The root words of democracy are demos and kratos (Greek for "rule by the people"). At first glance, these seem quite similar, but their operating principles are different.

Communism was born as a proper political ideology with the joint publication of The Communist Manifesto by Karl Marx and Friedrich Engles in 1848. The book deals with the problems of capitalism and proposes an income tax, free education, and (the hallmark of communism) public ownership. Democracy, on the other hand, has been around since the ancient Greeks. Athens was home to a famously long-lasting democracy that involved (in theory) breaking up voting units according to where one lived, rather than according to wealth. In practice, however, democracy was restricted to adult men.

If communism can be strictly called "common ownership" (i.e., by the people) and democracy "rule by the people," then their similarities are clear enough. Neither champions tyranny (rule of a tyrant), oligarchy (rule of a few), or plutocracy (rule of the wealthy). Both have noble intentions.

With respect to how they have been deployed historically, communism became quite oppressive under Joseph Stalin, who stifled creative thought and political resistance under its banner. During China's Cultural Revolution of the 1960s and 1970s (under Chairman Mao Zedong), millions of people died as the youth were encouraged to purge China of its champions of tradition. Communism led to mass incarceration in China; in the Soviet Union, it led to the creation of labor camps, called gulags. When the public controls the mode of production (in an effort to produce a classless society), the government controls the people at their own peril.

Is democracy immune to such pitfalls? Certainly not, according to political theorist John Stuart Mill. In Mill's 1859 publication On Liberty, he argues that democracy is flawed insofar as it may result in the majority actually oppressing the minority, who ought to have an equal voice in government. Like communism, democracy promotes the rise of a demagogue: a ruler who cultivates support of the masses while actually seeking to accomplish his own ends.