I am a part of a small branch of the Reformed tradition known as theonomy. As a whole, the group has gotten the reputation of not liking the idea of democracy. This is based, usually, on RJ Rushdoony's thought that "democracy" sought the lowest common denominator in any situation (if equality is to be had, it is easier to level the high than bring up the low), which would lead to forms of socialism and communism. In this sense, I agree that "democracy" or "mob rule" are bad things. Why? Because vox populi is not vox Dei. The voice of the people could very well be (and often times is) the voice of sin and evil. However, I still believe that a form of democracy grows out of the Christian religion.
I am opening a coffeeshop soon (in the dispensational sense). Part of the concept behind the establishment is that it will, hopefully, function as a "neutral" place for people in this neighborhood/city to meet, mingle, and associate (the three keys of little "l" libertarianism). That is, it (hopefully will be presupposed by the rest of the argument) will enable people both in and out of the kingdom, all of whom share the imago Dei, to collaborate on how to live, work, and play in this corner of God's creation. Ray Oldenburg, in his book The Great Good Place, describes coffeeshops and their ilk as levellers, that is, as class and status relativizers. No matter who you are outside of a shop like that, you are an equal on the inside.
Every man, no matter if he is a follower of Christ or not, is seeking to live the good life in his self, in his family, in his neighborhood, and in his nation. He may have a flawed understanding of what the "good life" is, but he is still working for it. No other man, in my understanding, has the right to force him to conform to a particular vision, unless he has already come under contractual agreement to conform to such (hence the penalties for switching divine loyalties in the Deuteronomy and Hebrews). In a neighborhood gathering place, these ideas and visions can be tried in a comfortable, welcoming space with neighbors. Bad ideas can be rejected, good ones can too. Some will be accepted and tried out, whether it involves having Guy X fix Woman Y's electrical wiring or Woman Q watching Woman O's children for an afternoon. Maybe it will involve a heated political discussion that ends on friendly terms (since no one is host, no one has the right to kick the other "scoundrel" out). This, I believe, is true democracy; one that does not get its legitimization from the polls or ballots, but one that lives on the streets and actually gets things done. It is a truly libertarian vision (in my opinion), since it involves voluntary associations that can be made or broken with little to no community damage. This is the sort of democracy that avoids the "common denominator" problem, since no man has any claim on another to cowtow to his position. A man's claims can be rejected in this sort of setting without rejecting the man himself.
All of this grows out of the idea of the imago Dei. In Richard Middleton's important book The Liberating Image, he argues that ancient cultures such as Babylonia used the idea of imago Dei as a way of demarcating the king as divine representative on earth, with the common run of folk being lesser forms, worthy to be ruled. He argues, rightly I think, that the Bible democratizes that concept--no one man is imago Dei, but since all men are from Adam, all men share the image (same as they share his rebellion). The image finds focus, later on, in the Davidic king, but is more symbolic than actual--even the king is under the law (Deut. 17). In Jesus, the image is again democratized, since every believer is renewed in the image (which was tied to rulership in the beginning). The Church, then, plays the important role of being the ruler, through Christ, of creation by serving the creation, which includes fellow images, whether in Christ or not. In this way, the Bible gives rise to a very subtle, but important form of democracy: every man and woman has responsibility of their own affairs and the right to advocate their vision of community life. They cannot force this vision unless their is a community contract that stipulates so (I think that this is the importance of the neglected ancient act of "covenanting").
This may be part of the reason that so many governments in the past have banned coffeeshops. Too much intelligent thinking by the "common" folk usually leads to a loss of the arbitrary power that elites hold. I'm running a coffeeshop and proud of it.