This article examines the issue of democracy and democratic theory, in order to give a concrete meaning to the concept and to highlight the main theoretical approaches and issues facing democracy in contemporary society. In this sense, the term of democracy is conceptually defined. It is approached the diversity of democracy concept, which is given not only by the etymological meaning, but also by many other historical, political, philosophical, cultural, economic, and social circumstances, all contributing to many interpretations and models that have this concept. Therefore, a special attention is given to the analysis of the phenomenon of democracy in the history of political thought since ancient thinkers towards contemporary authors.Although democracy is now seen as the best form of government, yet it faces multi-faced crisis, with different socio-political cleavages. For this reason, it is examined the “democratic deficit” in terms of current issues involved in every democratic system, including transitional regimes, as is the Republic of Moldova. Since the functional democracy provides a legitimation of political life in general, the author attempted to answer some problems regarding the advantages, disadvantages and limitations of democracy, its paradoxes and challenges in contemporary socie