democracy; democratic system of government
Refers to the political system itself, as opposed to the abstract concept (民主主義) or a democratic nation (民主国家).
That country has adopted a democratic system of government.
Under a democracy, the people hold sovereignty.
民主国家 is a democratic nation or state, whereas 民主制 is the system itself, not the country.
Compound of 民主 (minshu, 'democratic') + 制 (sei, 'system'). The term is a straightforward Sino-Japanese word formed from kanji components.