Referendums might be the face of direct democracy, but that doesn't mean they make democracy as whole magically better or even "perfect". Despite this and that writing about how democracy should look, democracy doesn't really have a complete, comprehensive book of rules to follow and as such, obviously, is not immune to being misused, either by people inside or outside of the system. There is a reason why even "democratic" countries of today differ between each other, both regarding laws and ethical practices.
So all this talk about how democracy is good only when it does YOU good doesn't really help with making the problems of the system go away. So if we talk about what should be changed, personally I'd make voting compulsive, for starters. The most obvious and immediate objection to this would be by some freedom-of-everything supporters, telling you it's not all right to force people to be involved in democratic process as this tramples on their free will. But to that I can only answer that if there are rules about crime and punishment to follow, and said rules are there to ensure stable and fair society (that is, at least in theory), so should there be rules of every resident to get him or herself involved into ensuring society stays democratic. If it should be every person's right and duty to fight against unjust laws, why not go further?
But this, of course, still doesn't solve all problems. If only. There's the simple problem of sometimes, there are referendum propositions or maybe politicians to choose from that majority simply do not agree BUT they are not given the third or whatever option. What should you do in a system, which offers 2 choices but you are not satisfied with either BUT you also HAVE to vote? You cast in the "undecided" vote, usually. Which is a problem because null vote has zero power. So that's the problem. In order to further improve on the democratic process, we ought to give null votes equal power than all other votes. If everyone votes on elections, but only 50% of people vote for any candidate/option, while the rest vote disfavorably of all options - in case of parliamentary elections (that is, people vote parties that in turn take hold of power, for all those who are less familiar with this practice (like I'd guess our compatriots from USA)) that would basically mean vote of no confidence to all parties. Which in turn would mean that everyone would have to take few steps back and ask themselves what are they doing wrong when flat 50% of the country is opposed to them/proposed laws or whatever. Which in turn might make democratic process a lot more interesting.
BUT OF COURSE even this all doesn't mean democracy would always work. I mean, what to do in a case when 50 or more % are against law that not only you but many international communities deem as just? What to do when people totally legally elect a guy with funny mustache, bad fashion sense and questionable ethics? Making democratic system more fair or just mobilizing people to become more avtive in politics doesn't necessarily mean people will also become more SMART, yeah?
Well, that's just some ideas I had.