I think you've put your finger on it, and it was the genius of our founding fathers and our ancestors before them to recognize this.
There can be democracy without individual rights, classical Athens being a prime example. The individual citizen there had no rights that couldn't be overridden by a vote of the assembly.
The genius of our forefathers was to combine democracy (government by the people) with a limitation on gov't power, that limitation being individual rights.
Obama and Harry Reid's gov't can still be called a representative democracy, since we still have the vote. But Obama and Harry Reid want no limits on that gov't's power, so that the people's vote has become merely a choosing of masters, as our former system of limited gov't/ individual rights is replaced by a system of unlimited gov't.
I don’t think we have a democracy... more of a malfunctioning giant government system with occasional voting inputs which shuffle the chairs on the Titanic’s deck, so to speak.