In a functioning democracy "they" is "us".
That notion is generally not in keeping with the western common-law tradition, which holds a more skeptical view of governments which have the moral authority to operate within any domain and with any powers so long as they can connect those powers to the consent of the governed.
Instead, the tradition of the United States, for example, is that government power is limited and enumerated and does not change no matter what "us" may say about it in the form of political elections.
I suggest that you read (just an example) Federalist 10 by James Madison and consider how thoroughly these guys thought through the argument you are making about democracy and how hard they tried to make something better.
And none of this is to amount to founder worship: we can all see now that there was tremendous hypocrisy in founding a nation which didn't categorically prohibit slavery from the get-go. And in fact, slavery continues to this day in the form of a prison system that "us" has occasionally been happy to endorse, the rights of the incarcerated be damned.
All I'm saying is: don't tout democracy in such simplistic terms without also considering the arguments of its critics.
It's no different than the same moral hazard large corporations face that we empower through cronyism and the effects are obvious, notably events leading up to the great financial crisis in the late 2000s.
Large institutions not held accountable get to take outsized risks knowing they'll always be bailed out and not held accountable. This article is one of many examples of such.
The whole setup seems more and more like a grand cash grab.
The Permanent Apportionment Act of 1929 was enacted because it was "too hard" for Congress to rezone/redistribute House of Representative members. This measure, and ones like it both in law and in business, create large bureaucratic organizations that move slowly and are prized for their stability, which is another word for "zero accountability or disruption."
Very few people set out to have growing inequality of resources or to amass power for the sake of doing it, though of course the people in power now seek to keep it for the sole reason of not wanting to lose it (they frame it as "too big to fail," "stability is important," and so forth).
It's just pure inertia. We went away from smaller regional governments that reports up to a lightly-empowered federal one with a lot of individual liberty step by step, for convenience and for "safety" (any number of military or police actions, foreign and domestic), and we get what we deserve.
Leaving aside the question whether the US is a "functioning democracy"...
In a "functioning democracy", "they" is in fact very often not "us", by definition in fact, since every vote has winners and losers.
Plenty of stuff that I disagree with is electorally popular: unlimited police powers, extremely severe punishments for crimes, military intervention in foreign affairs, censoring of offensive speech, criminalization of victimless acts like drug use, cutting taxes, lack of restriction on CO2 emissions, and so on. I certainly don't define myself as part of any "we" that supports, or is implementing, any of that.
"The will of the whole Nation is expressed in the State" is an authoritarian idea, not a liberal democratic one.