It is just so much better than Despotism, and if you can get settlers to irrigate just a few squares around the city growth will be much faster. After Monarchy, government type depends on what you want to accomplish. The next logical step, unless you are engaged in a huge war, is to advance to a Republic. This will double all of your trade, thus giving you a lot of money and faster scientific progress, as well as making more people happy with luxuries. Of course scientific progress is cut in half, so this government is best suited for someone who wants to conquer the world.
Democracy though is a good choice for someone who is aiming to win the space race.
It has the benefits of increased trade as well as giving you the chance to successfully wage war against an enemy. These are just the two extremes of government, and depending on your style of play and goals in the game, your ideal government will vary. I suggest trying each government for a while at least once, and just seeing how it works out. In the early stages of the game, committing a city to complete the right wonder can be a huge boon to your civilization. Basically, what you have to choose from are the Pyramids, the Hanging Gardens, the Colossus, the Lighthouse, the Great Library, the Oracle, and the Great Wall.