A tendency for critics of Didion's fiction to draw upon knowledge of her public and private character was taken to the limit in 1980 by Barbara Grizutti Harrison. In a witheringly unsympathetic essay included in her 1980 book Off Center, Harrison accused the author of being self-consciously neurotic, a reactionary, and a stylistic trickster. Reviewers of Democracy were not disposed to receiving Didion's intrusions of herself into the narrative with much sympathy. Many of them were convinced that these intrusions weakened the novel. But a number of early reviewers were more positive about Didion's style than Harrison. Phoebe-Lou Adams, reviewing the novel in the Atlantic, described it as being "striking, provocative, and brilliantly written." Janet Wiehe, despite thinking that the book had the "immediacy of journalism" rather than the emotional depth of a great novel, nevertheless summarized it in Library Journal as "sophisticated political fiction, written with skill and wit."

One of the book's staunchest early supporters (and one of the few defenders of Didion's intrusive narrative device) was Thomas R. Edwards, who reviewed the novel at length in the New York Review of Books. Treating it as serious fiction, and drawing on its echoes with the book of the same name by Henry Adams, he wrote: "Democracy is absorbing, immensely intelligent, and witty, and it finally earns its complexity of form. It is indeed a 'hard story to tell,' and the presence in it of 'Joan Didion' trying to tell it is an essential part of its subject." A different point of view was expressed by Thomas Mallon in The American Spectator. In this review Mallon complained about a lack of range in Didion's female characterisation. "Inez Victor has in the past gone by the names of Lily Knight McClellan, Maria Wyeth, and Charlotte Douglas. They were the heroines of Didion's first three novels, and they're still the heroine of this one. All four women have the same frayed psychic wiring." About Didion's entry as a character in certain scenes of her story—for example, a conversation she has with Inez in the office of Vogue—Mallon writes, "There's a sort of desperation to the device." And about Didon's characteristic short sentences and repetitions, he observes, "One can sit down with the same syntax too many times, just as one can bump into the same heroine once too often."

The novel has been the subject of several critical essays. In "A Hard Story to Tell—The Vietnam War in Joan Didion's Democracy," Stuart Ching analyses both the fragmentary nature of the novel and its factual correspondences: "Jessie's flight to Vietnam illustrates the confusion in Southeast Asia during the last few weeks before the final evacuation of Saigon. For example, between April 15 and April 28, 277 whites and blacks without identification or passports who spoke English and presented themselves as Americans at evacuation sites were evacuated without question." The cumulative conclusion of Ching's analysis is that "the fragmentation of the fictive world—Inez's flight to Hong Kong—concurs with the collapse of the external world—the fall of Saigon."

The novel's political themes were considered by Michael Tager in his 1990 essay "The Political Vision of Joan Didion's Democracy." The concluding paragraph of this essay states: "Didion's novel portrays a democracy vitiated by a secretive national security apparatus and image-conscious national politicians. Both use euphemisms and vague phrases to disguise or justify their questionable activities to the public ... The plot of Democracy illustrates [George] Orwell's claim from his essay 'Politics and the English Language' that the misuse of language contributes to sloppy thought and misconceived action, and that indefensible acts require misleading language for justification." In "Postwar America and the Story of Democracy," an essay concentrating on the novel's structure, another critic, Alan Nadel, explores how the language of justification affects the tone of the novel as a whole. "By foregrounding her roles as author and as character and by mixing the levels of fact, Didion denies the reader the same distance she has denied herself."