I think the title of a democracy cannot be legitimately given to the UK; it is a monarchy or an oligarchy with significant democratic aspects however. Some of the obvious reasons for that are:

• At a theoretical level, how can one fit the concept of a "House of Lords" into a working democracy? I remind readers that the HOL has veto power over the democratic legislative process. A common argument is "oh well, but when was the last time that the veto was exercised?" but I think that it can be validly argued that maybe many laws that would have been proposed, never were because they would have been vetoed.
• Again at a theoretical level, how can the UK call itself a democracy when there is no corporeal binding contract between the government and the citizens about what their fundamental rights are (e.g. a constitution).

On a more pragmatic level, the UK certainly is a liberal and democratic place but there are still significant problems.

• The British society tolerates but does not integrate. Barrack Obama and his views would have been tolerated and would have even been perceived as refreshing and entertaining but him running for UK prime minister and standing a chance is anywhere between 100 and 500 years away.
• There are social classes that one can clearly see and feel. There is a big social class of true peasants.
• Can't think of anything else right now, which is good! :)

As far as fairness goes this is a big convo. But to me, a democracy also does not tell you what is best for you; it just gives you rights that you are free to exercise or not. If I prefer to go tailgating before some concert and get stupid-drunk instead of voting, that is my right as well. A vote that is truly motivated is 10 times better that a conventional vote by people who have not thought about it at all. True, this gives rise to the danger of votes being bought; but you see, this is great because again the system trusts the people to take care of themselves and does not 'protect' them by telling them what is best for them or how to protect their rights. This is freedom: freedom from any authority or elite that is supposedly acting in my best interest.

It is difficult to explain the concept of true freedom to Europeans sometimes because there is deeply rooted ancient conventionality in their social upbringing. For the same reasons the right to own a gun and even the right to not wear a seat belt are still being fought for in the most democratic country in the world.

The issue is that the freedom of all needs to be protected and this becomes a challenge (often a bloody conflict) if you are really concerned about freedom and democracy. There is no easy solution but in the process you can also clearly see the gains that you make as a free agent in a world of countries full of 'citizens' that often do not understand at all what freedom or democracy is.