Firstly, you need to consider what democracy means. The most simplistic way of defining democracy is as a system whereby power is 'for the people and by the people'. This means people are able to participate in the governing of their country in various ways.
This leads onto the difference between indirect and direct democracy.
Direct democracy is when the whole population participates in a political activity. For example in a referendum, the whole population gets a vote and then their decision is directly implemented.
Indirect democracy is also known as representative democracy. This is when people elect government officials to make decisions on their behalf. For example, in a general election in the UK, people vote for their MP (member of parliament) to represent them in Westminister.
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