Monarchies are limited, also called constitutional, or absolute. In limited, or constitutional, monarchies there is a division between the governing body and the ruling body so that an independent body, usually a parliament, establishes laws, while the ruling body, the monarch, remains influential in affairs of state and public welfare. With the monarchy limited by a constitution, as Great Britain's monarchy is, the role of the monarch is defined constitutionally.
Democracies are governed by elected heads of state, usually a President or a Prime Minister. The right to make laws, levy taxes, raise a military and engage in war resides in the legislative bodies, a parliament or a congress, that have also been elected by the populace. The president or prime minister of a government works in tandem with the legislative bodies, while the court system tests and validates or challenges laws and actions that are called into question. The paramount difference between an absolute monarchy and a democratic (and/or republican) government is that there are safeguards in place in a democracy so that any action taken by a head of state or a legislative body can be challenged in the highest court and, possibly, rescinded.