As far as I know history, there are many alternatives to democracy. For example monarchy, aristocracy, plutocracy, and other possible mixes of these. That being said, I would like to point out, that in the first "democratic" state of contemporary world, USA (I exclude ancient greece and cities like Athens, where, to be perfectly accurate, not everyone had right to vote - among other groups, women and slaves were excluded), initially only around 10% of inhabitants had the right to vote, because they were required to meet certain critiria (knowledge of the English language, in some states having real property, and so on). This model is far from what we ordinarly today call "democracy".
RE: Why democracy is a fallacy.