Democracy is the only game in town. There's no other ethically viable way to have a country governed. Democracy is based on the idea that a people should govern themselves, basically, but that doesn't mean that a mob will rule, because no decent democracy does without a basic set of rules that cannot be changed by anyone. In the German constitution, the very first articles containing the Rights of Man and the Civil Rights are thus guaranteed to last eternally.
The only working kind of democracy we know is representative democracy, where every adult citizen of a country is regularly allowed to vote for representatives in common, equal, free and secret elections. These representatives then make laws, enforce them, nominate delegate officials and institutions to enforce them, and implement 'standards control' by manning or installing courts of law.
To prevent a democracy from being corrupted somehow, many techniques have been devised by wise men such as Montesquieu (Montesquieu is my hero, by the way). Those techniques include:
- Horizontal division of powers: There's an executive power, a legislative power and a jurisdictive power.
- Vertical division of powers a/k/a federalism: In Germany, we've got the federation, the federal states, then there are governmental districts, counties, townships -- you get the picture. Every administrational layer has adequate competencies and a say in the affairs of the layers sitting on top of it.
- Checks and balances: An intricate network between the powers to make sure that their competencies remain equally distributed, that they've got an equal say.
- Immunity and indemnity: Makes sure that a representative (say, a senator) cannot be legally held responsible for decisions he made in his political role. Also makes sure that he cannot be jailed for some mushy reason during the term for which he's elected. This ensures absolute independence for government officials.
- Expenses: Ideally, the state should pay for any expense of any elected official and make it a crime for them to accept money from anyone else. This prevents corruption.
- Codified law: Every administrational procedure should be specified in a sufficiently exact way, to prevent people bending the law and/or constitution out of shape.
A modern democracy is a very delicate and complex machinery. Democracy is characterised by the fact that people always complain the loudest when it works best, and that there is no police terror ensuring peaceful and quiet streets. Democracy has helped increase both the material and the ethical standard of living in any country where it was ever effectively implemented. A working democracy leads to prolific intellectual, scientific and industrial output in a country.