This question is asking for both a historical and ideological understanding of liberalism and democracy. It is also a matter of extent. Firstly, defining liberalism succinctly through individualism, democracy through collectivism and liberal democracy as checks and balances to ameliorate the two should suffice to set up any answer. The key points to consider are what liberals have previously thought and their fear of democracy (Madison and the propertied versus the propertyless), the fear of mob rule and of a larger than minimal government which democracies tend to entail. On the other hand, you would be hard pressed to find modern liberals who are anti-democracy, with many contemporary liberal philosophies being predicated on liberalism such as that of Rawls. A discussion of the aims and methods by which liberal democracy tries to limit majoritarianism while maintaining majority rule is central to the final part of the answer. To conclude, remember to succinctly summarise your argument and to round everything together, answering any questions you feel you have left hanging.
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