‘Democracy’ is a pretty loose description. Swiss ‘democracy’ is very differnet from American ‘democracy’
But, if Democracy aims to put the power in the hands of he people, then democracy would screw up whenever ‘the people’ collectively screw up. Or, if the people contract their power out to someone else.
The people screw up: Depends on your view of ‘screwups’. If everybody gets a vote, but most people are idiots, idiotic things can become policy. Or, if you manage to trick people into voting for something, you can misuse the power of people. So a complete moron, or a fascist hate-machine can get elected, as long as he can appear to be something nicer.
Or you can get failures where the ‘one man, one vote’ system is seen as meaning ‘I vote for what’s good for ME’; a ‘Majority Rules’ mentality. Like, popularity of something that might be really bad for a small group of people, but pleasant for the majority. Example: right now, Canadian politicians are discussing legislation to make homosexual marriages legally equivalent to straight ones. There’s a lot of demand for a ‘free vote’ in the legislative assembly, so that members can vote yes or no to the bill in line with their conscience, or with the views of the people they represent. The opposing view is that gay marriage is a matter of equality for people and of human rights, and that the decision to not subjugate the minority can’t be a ‘Majority Rules’ decision.
Often, democracies have protections in place to limit the power of the people, or their elected representatives. A written constitution, for example, might say ‘All men are created equal’, and if the country holds to that constitution, then it can’t pass laws that violate it, even if they’re popular. Some constitutions have in them procedures for amending the constitution, but usually it’s very difficult to do.
The people contract their decison-making out: They do this whenever they allow themselves to be ignorant.
For example, they might accept what they’re told in advertising, or heavily slanted news reports, or even lies from their own government. Or, they may do what’s popular, because it’s popular, without questioning it. Cultural and social factors influence peoples’ decision-making a great deal.
If you do what’s generally accepted without thinking it through for yourself, including honestly analysing the merits of the other options, you’ve delegated your power to cultural mores, and the power rests not with the people, but with old ideas.
If you do what you hear from advertisers and believe pundits or politicians without seriously questioning, you’ve delegated your power to the pundits and editors, anf the power lies with the media giants, rather than the people.
In any case where people are ill-informed, apathetic, or let someone else do their thinking for them, democracy can fail.