if you had an "ideal" democracy in the really absurd and stupid sense that everyone votes on every issue, and everyone's vote counts (and yes, if you're thinking that isn't coherent, you're right), well what would happen is, most things that got voted on....well you'd have 7% for one policy, 4% for another, 3% for another, etc...
So then what? We could just have the highest thing win. Then 93% of the people get screwed I suppose (though they'll form parties, coalitions, and voting blocks so that won't happen as much in the future).
Or you could do run-offs. This slowly forces minority opinions to pick a more popular opinion to support, too. similar effect to parties/coalitions/voting-blocks
What we couldn't have is a mixed law that incorporates the ideas of every single voter. it wouldn't come out to have a coherent meaning. cause different people will support contradictory ideas.
so we discover the reality of our system is very similar to the real effects of a so-called "ideal" democracy (and also that you have to make some tough choices to have a workable democracy, and can't just rely on the "ideal" notion that everyone has a voice). and truth is there are very good reasons for a two party system. ok, i admit that point is debatable, but saying the US isn't a democracy is absurd (BTW I'm aware that there are technically other parties, but stuff *is* setup for only two parties to be powerful at a time).