In the passage, democracy is explained as a crucial component of the republic that India is aiming to establish. The speaker clarifies that a republic can exist without being democratic, but India is committed to a democratic form of government. Democracy, in this context, is not just a system of government but a philosophy that aligns with India's past, values, and future aspirations. It will be shaped by the people's needs and accepted by them, and its specific form will be determined by the nation’s legislative body.