The aim of this paper is to clarify the basic terms related to democracy as a political idea of state rule and to describe its characteristics. The concept of modern democracy encompasses broad aspects of social organization and functioning of the state, as well as political culture. The paper includes theoretical concepts of democracy, but also relies on practical examples from the Republic of Croatia, which I know best. Modern democracy is depicted through the concepts of multi-party system, free and fair elections, the existence of civil liberties, freedom of the media, separation of powers and a developed civil society. The examples show how real political initiatives can be created from an organized civil society, which we can see by examples today in the Republic of Croatia and once in Russia. Political parties, which are established as a link between society and the state (primarily the parliament as a legislative authority), expressing special social interests and giving them a political form, shape the political will of the people.