this is IMHO no different the real world - a 'good' despot/monarch/etc can be a good leader, but this is highly dependent on the situation (read: leader), and leadership transition process is always a risky one. Democracies/Republics work well so long as the community has a generally shared vision, but can be hampered when there is too much dissent, but generally avoid the succession problem
Democracy is more of a principle (is just means that legitimacy of government comes from some aggregate choice of the governed), than a political system. Radically different political systems can be classified as democracies, all the way from direct vote (self-organized communes, also Switzerland) to complex federations with layers of indirect representation, such as the USA or the EU -- with a lot of other interesting alternatives such as sortition.
In a FOSS it is very easy to fork, so if the BDFL get's mad you can just say thanks and fork the project and continue. So that keeps BDFL in check.
IRL you own a plot of land, or a home. Or you have a small factory, and there are a lot of network dependencies, who does you sell the supplies, where you sell your products. It the local BDFL get's mad it is very difficult to move. (Specially if there are some cash flow controls were you can't get out with the money that you get selling your home or that you have saved.)
You can fork Linux if the dictator doesn’t suit you, but you can’t fork a nation. You also can’t switch to another nation that is more appealing, generally. Finally, Linux can’t imprison and torture you if you criticize it
