A democracy is a form of government in which power lies with the people, typically through elected representatives and free elections. In contrast, a theocracy is a system where religious leaders govern and the state's authority is based on religious laws or texts. While democracies prioritize individual rights and secular governance, theocracies integrate religious beliefs into politics, often limiting personal freedoms. This fundamental difference shapes governance, policy-making, and societal values, making it crucial to understand the implications of each system on citizen participation and rights.