I semi-agree, but the type of democracy you are referring to would involve much smaller groups with more power and would ruin the political "economy of scale" that we get from having the same laws apply to everyone over vast spaces.

I think having a mostly crippled central government is probably the most realistic alternative but you can see how that is taken advantage of in the US and how it fosters unnecessary discord between people whose interests are generally aligned.

It’s how the country I live in, Switzerland, is organised, one of the most prosperous places on earth.

https://freedomhouse.org/country/switzerland