One problem with government, even in a perfect democracy, is that it cannot solve local issues. Things like parks, parking, bridges, flooding are always local. They require difficult decisions, study and attention lasting weeks or months, to solve. Often they are only comprehensible to local people. Usually each area requires a different kind of solution.
Democracy is capable of fixing the ineptitude of government. It will change teh nature of government, to be effective, fast, and legitimate. But it cannot solve local issues any better than today’s western governments. Effective local government is required.
To be effective, local government needs to be able to raise taxes and build infrastructure. It also needs to exist on many scales. So legislature needs to be created to allow such things to form and dissolve, as local issues arise and as they are needed by communities.
To be clear, conventional county and city councils are not the kind of local government referred to here. Although they are formed through elections, they are not effective at solving local issues.
This is because they are not flexible - their size and powers are appropriate for solving some kinds of problems but not others. For example they are good an building parks and libraries, but not fixing potholes or creating bus routes. They only work well when the scale of the project is the same as the scale of the council.
For example one road might have a problem or project that is not interesting for anyone outside it. It could take years or longer to persuade a county council to act.
Or a transport route might be needed that requires coordination between several councils. They will never agree on the funding.
Local government should exist on many scales, such that their authority overlaps.
A group of residents of an area should define the area covered, and the remit of the new government. After obtaining enough signatures, this should go to a vote of the area’s residents. If enough (for example 70%) of the residents agree, the government will be formed.
(I think that 70% majority should be required for any action, like charging a tax or building something. But for a negative action like abolishing a tax or government, only 50% is needed. So only overwhelmingly popular things will be done. There should be a few other obvious restrictions on their power, like inability to act against residents of other areas.)
Once formed, the government can charge taxes, do public works, make laws, charge fines, etc. Normally the staff would be volunteer, but there would be nothing stopping it from paying people for the admin work that must be done, or hiring salaried staff. But it can only act within its remit and only after passing a vote.
The vote to create a government should be postal, but after that, the nature of further votes should be declared in the government’s constitution. Maybe only those who attend the meetings can vote on normal issues.
All of this requires some changes to the law of the territory-level government. But there is much reason to make those changes now.