Great question, which I am in no position to answer adequately.
My approach Re oolite (usually) : if the classical lore say its so then it likelly is.
How or why exactly I prefer to leave to the player. Communism for example is a label that has been applied many times to governments that have either failed to live up to their supposed ideology OR failed to represent 'true' communism according to some. And similar could perhaps be said of other government types too.
What a Galactic register likely wants to know about any given system first is what might it be like to deal with them?
If such dealings are superficially democratic (e.g. choice of dealer and significance of that choice) then why not label it as such for convenience?
So maybe as a system summary it's superficial but useful. It's not really a democracy but if you think of it as such then you'll do just fine - you're not making a home there, you're just passing through.
Likewise, 'Insect' may be a label of convenience, as I've opined elsewhere. Or maybe it isn't, player discretion is what I'm advocating for, if anything.