Israel is not a theocracy. When God returns to earth and sets up his worldwide government, then you can talk about a theocracy ... :-) ...
Israel by default is a theocracy because they are God’s chosen people. His promises to them are the same yesterday, today, tomorrow, and until the end of days. God covenant’s are irrevocable. The people may sin and rebel and Israel was taken into captivity and trial for it’s sins, yet they are in the holy land again as God’s chosen people and for His purpose and all those that curse His people will be cursed and all those that bless His people will be blessed. Thanks be to God.