It is next to impossible for this to be done except in small communities, but the spirit of democracy prevails in many republics and some monarchies. That 1927 civics textbook had it right. Instead, the book referred only to dictatorships and democracies. In a democracy the final authority rests with the people. Those who govern do so by permission of the people.
Government is run, in other words, with the people's consent.
The United States of America is an example of a democracy. It is not. Let me quote what I would consider to be the ultimate authority. This definition does not square with Madison's definition. If Senators want an argument about this, don't argue with me, argue with Madison.