A democracy is a government in which the people possess the ultimate power, while a dictatorship is a government in which the ruler possesses all the power. The exercise of power in a democracy varies, as the people may exercise their own voting power directly or through elected representatives through a free system of voting.
The Greek city-state of Athens was known for being the first major democracy. Citizens would come together and vote on the decisions that faced them. In representative democracies like the United States, Great Britain and other countries, people elect representatives to make their decisions for them. These representatives gather in legislative bodies to make decisions for them. The British House of Commons and the American House of Representatives all consist of elected officials who represent specific voting districts in making their nation's decisions.
Perhaps the most infamous dictatorship of the 20th century was Nazi Germany, governed by Adolf Hitler. As long as he was alive, the entire nation followed his lead, as the country attempted to conquer all of Europe as a first step toward global domination, in addition to purging Europe of such "undesirables" as the Jews, Gypsies and homosexuals. The entire nation followed the lead of one man, which fits the definition of a dictatorship perfectly.