The origin of the word 'democracy' is from late 16th Century, French, 'democratie'.
This came to the French via Latin from the Greek word 'demokratia'. 

Demokratia from the Greek words:

demos = the people 
+ 
kratia = power, rule  

'Democracy' As defined by Oxford American Dictionary:
n. a system of government by the whole population or all the eligible members of a state, typically through elected  representatives: capitalism and democracy are ascendant in the third world.

• a state governed in such a way: a multiparty democracy

• control of an organization or group by the majority of its members: the intended extension of industrial democracy

• the practice or principles of social equality: demands for greater democracy

'Democracy' As defined by Webster's 3rd International Dictionary:
n. 1.a. government by the people: rule of the majority
        b.1. a form of government in which the supreme power is vested in the people and exercised by them directly (as in the ancient Greek city/states or the New England town meeting)-- called also Direct Democracy
            2. a form of government in which the supreme power is vested in the people and exercised by them indirectly through a system of representation and delegated authority in which the people choose their officials and representatives at periodically held free elections-- called also Representative Democracy
   2. a community or state in which the government is controlled by the people; specifically: a state in which the supreme power is held and exercised directly by the people rather than by their elected agents (in a democracy, the people meet and exercise their government in person; in a republic they assemble and administer it by their representatives and agents ---James Madison)-- compare republic.
   3. usu. cap.
      a. the principles and policies of the Democratic party in the U.S.
      b. the Democratic party or its members
   4. the common people esp. when regarded as the source of government
   5. political, social, or economic equality : the absence or disavowal of hereditary or arbitrary class distinctions or privileges (Democracy stands at a midway point, with personal freedom limited only by another concept --- that of equality ---Louis Wassserman)
   6. a state of society characterized by tolerance toward minorities, freedom of expression, and respect for the essential dignity and worth of the human individual with equal opportunity for each to develop freely to his fullest capacity in a cooperative community
   7. control through representation by the rank and file esp. in industry --  see Industrial Democracy