When does democracy really work?

For democracy to work, following two conditions must hold:

1. Informed and qualified voters, of which a representative sample, actually bother to vote: The qualification can be achieved by restricting the domain of sampling for the votes or by implementing meta-moderation on the first level of votes.

See for instance, voting on online sites to improve signal/noise ratio: it works well on slashdot -- votes say informative, offTopic, troll, funny, insightful etc instead of being binary and each user can configure the weightage for the votes separately. Now that is a GOOD implementation.

2. Low stake in the outcome: The democratic process works well where no-one stands to gain significantly from manipulation. When the votes are used as a basis to give goodies then people have an incentive to abuse it. Eg: the US government. It ain't working so well because the players manipulate it to get significant goodies upon winning.

More examples: "Search engine optimization" is indeed an industry but if we consider a "typical search for information and not for a product", such a search is of a high enough quality. The same holds for the average wikipedia entry on a "typical" non-controversial topic. There are a few "high stake" entries that have manipulation issues but that is exactly the point!