1 Lambert: I’m accepting xorn.
1 Alvissa: Thank you.
2 Mordekai: We should at least have a vote. Who wants to knock Alvissa out of the game?
2 Kyros: Aye!
3 Alvissa: What? It should at least be who thinks xorn are real!
4 Mordekai: No, this is how democracy works. Popularity contest, not about the actual issues.

Fantasy gaming settings often have a plethora of government systems, in an effort to differentiate the various lands and realms and provide a wide diversity of places for adventures. I don't think democracy was a very popular political system in the real medieval period, though. Although there were some examples of more or less democratic systems. The roots of democracy trace back much earlier, to at least the Ancient Greeks and possibly further depending on your point of view, so it's at least plausible for later societies (and fantasy societies based on later periods) to have elements of democracy in them.