Democracy and communism are, on the surface, similar forms of government that give power to the people. Nevertheless, the two forms of government are substantially different in practice, as democracy values freedom and is usually associated with capitalism, while communism developed in opposition to capitalism and values equality over freedom.
The word democracy comes from Greek for "rule by the people" and is contrasted with aristocracy, or "rule by the elite." Although democratic forms of government have existed across the world throughout history, historians see the Greek city-state of Athens as the first major democracy. Of course, Athenian democracy only included free men, while slaves and women were not considered worthy of citizenship.
European democracy was similarly limited. Although France's absolute monarchy was toppled by a democratic revolution in 1789, it soon was replaced by Napoleon's dictatorship and then restored entirely. By contrast, England and the Netherlands had longer histories of parliamentary democracies, though they too were limited as they excluded women and slaves and had strict property requirements that tied democracy to capitalism.
Marx and Engels
It was this capitalist aspect of democracy that Karl Marx and Friedrich Engels objected to in their famous Communist Manifesto, written in 1848. The manifesto saw capitalism as a way for the bourgeoisie, defined by Marx as those who own the means of production or in other words the factory owners and investors, to dominate democracy and exploit the proletariat, or the workers. Marx called for the proletariat to overthrow their bourgeois masters and establish a new system of government that gave power to the people without basing their power on wealth.
Yet communism did not live up to Marx's standard. Russia and China attempted to implement communism but really developed into dictatorships in which a select group made decisions for the good of all society, attempting to create equality but really just elevating themselves. Democracies of the 20th century ironically developed more equal societies than these communist states, as voting rights were extended to women, slavery extinguished and the ills of capitalism tempered with welfare policies.