Sentence:  A century ago there was in the Old World only one tiny spot in which the working of <WSD>democracy</WSD> could be studied. A few of the ancient rural cantons of Switzerland had recovered their freedom after the fall of Napoleon, and were governing themselves as they had done from the earlier Middle Ages[...]. Nowhere else in Europe did the people rule. 
Meaning of the word marked with <WSD> tags:  Rule by the people, especially as a form of government; either directly or through elected representatives (representative democracy).