I believe in the notion that two minds are better than one, that many minds are better than a few minds and that a government Of, By and For THE PEOPLE means the coming together of many many minds.
I believe a government of by and for the people is the best form of government because we are less prone to make errors although we may be slower to react to those errors. (For instance a king or a dictator could institute and repeal prohibition on liquor far faster than we did as a democracy).
A government of by and for the people needs be only as large as the needs of its citizenry. Those needs being dynamic, I see no reason that the size of this government needs to be static.
Currently there is a move on to change our government away from caring for the needs of its citizenry to the needs of those who feed it the most money. Anotherwords a government of by and for the highest bidder. That highest bidder is not even required to be a citizen of this country nor even a person at all.
This new form of government is not a democracy, it is much more selfish, being based on the needs of the individuals controlling the moneys spent on the government.
What the libertarians and the followers of Ayn Rand seek is an impossibility, a democracy based on the needs of the individual and not on the needs of We The People.
They allow the capitalism to 'do its thing' unrestricted, meeting the needs of the individual or capitalist over the needs of the masses within the democracy. This allows the individual to profit regardless of the wishes of the the citizenry and often against the very needs of that citizenry. By definition this is no longer a a government of by or for it's people and no longer a democracy.