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Democracy relies on the ideal of everyone having "their say" in the formation of a government. After a period of time, there is the ability to change the government if it is not achieving the outcomes that it proposed to achieve pre-election. There is a constant need to perform to improve the country or region, the motivation being to remain elected (in terms of Representative Democracy such as Australia or the United Kingdom - where the political party rather than the Prime Minister is where the loyalty lies).
Monarchy by its nature is inequitable and indeed unfair. It is the situation where the government of the day is determined by blood line rather than ability. It thrives on the knowledge of the "real" world and changing policies, procedures and legislation to improve the quality of living of all society's members. The tendency (as existed in pre-Magna Carta Britain) was for the monarchy to perpetuate itself and its close followers at the expense of the majority. Lack of talent, lack of motivation and simply lack of intelligence have further added to the inability of monarchies to govern nations.
This must be contrasted to the notion of a constitutional monarchy such as Britain and Australia, which has a monarch at the head of its government in a purely ceremonial role, but an elected parliament who govern in a manner set out in a constitution, and headed by a prime minister to serve as the legislative and executive arm of government.
There are several problems with monarchy. The first and most obvious is that the quality of ruler one finds under a hereditary monarchy is completely random. One may end up with someone skilled and qualified for the position or one may end up ruled by a madman, a petty tyrant, or an idiot. Not only is it a matter of the luck of the genetic draw, but the tendency towards inbreeding in hereditary monarchies means that the odds of ending up with someone with congenital problems is high. Even worse, people brought up knowing that they are guaranteed wealth and power just because of an accident of birth are prone to a sense of entitlement and lack a habit of hard work.
Although democracy may be prone to deadlock and can be hijacked by demagoguery or wealthy people buying elections, it still is the closest we have to a fair system. It also allows the people to pick their own rulers, giving them a stake in their government.
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