The very first model of democracy, that of Ancient Greece, was a direct democracy. In practice, this meant that the people – the free citizens of Athens – took almost all decisions together. However, after the Golden Age of Athens under Pericles (5th century BCE), this system soon dissolved.

The reasons for this dissolution play a very important role in understanding the opportunities and instruments offered today by direct democracy. The Agora of Athens had room for 5000 to 6000 people, a number too large for real discussions that address issues with a balanced approach based on common interests. This resulted in the rapid polarisation of the popular assembly (ecclesia), the escalation of the conflict between the rich and the poor and the demagogy of "class struggle". Another factor that did not serve the purposes of direct democracy (with a popular assembly) was that the citizens of Athens had to attend three or four assemblies a month and became so entangled in politics and public affairs that, as Giovanni Sartori wrote in his famous book on democracy, their passion shifted to politics, which led to the decline of the economy.

In the modern age, the frame of the restoration of democracy was the territorial state instead of the city state. In this context, direct democracy (i.e. discussion at the agora) could not be established; therefore it was superseded by representative democracy, which replaced popular decision-making with parliamentary decision-making. Of course, the basis for this was that parliaments became the instruments of popular representation with the introduction of democratic elections.

During the 20th and 21st centuries, direct democracy has receded significantly in modern states, as the modern approach to democracy focuses on representation.

Three institutional forms of direct democracy – more precisely, of the direct influence of the "people" on political decision-making – have emerged in modern representative systems, namely, a) referendum (national or local), b) popular initiatives and c) recall. These institutions and procedures are aimed for creating the possibility to compensate the flaws in representative democracy.

The most common among these institutions is the referendum which enables voters to cast a vote directly on certain political or legislative questions. In order for the result of the referendum to be legitimate, it is very important for the questions to be as simple and obvious as possible (so that voters interpret them similarly); therefore, the wording of a question put to a referendum requires careful regulation. Consequently, there are questions which cannot be put to referendum under constitutions or other laws. Constitutions and other laws also govern how referendums are conducted, and regulate, for example, which questions must be decided by referendum and in which cases is a referendum subject to consideration. With regard to the legal effect of their results, referendaums can be decisive or consultative.

There is no standardised terminology. Instead of referendum, the terms popular vote and plebiscite are often used. Plebiscite is mostly used when the matter in question is the change in sovereignty (e.g. over a territory) or in the form of government/state. Popular vote is rather used as an umbrella term.

In the case of a popular initiative, direct democracy serves the purpose of enabling citizens to initiate (of course, after collecting the required number of signatures) an issue to be put on the agenda of and discussed by legislative bodies. This also requires careful regulation of the form and authentication of the signature collection sheets, the registration and duration of the signature collection and the number of valid signatures required for the legislative body to discuss the subject-matter of the popular initiative. Countries follow different practices regarding this.

Parliamentary systems usually do not have the institution of recall, whereby citizens can initiate a vote on the removal of an official from office by collecting the required number of signatures.

In political science, referendums are considered a lower form of political decision-making as compared to the parliament, and direct democracy merely supplements or corrects representative democracy. Some say that the instruments of direct democracy cause instability in the operation of democracy. From the viewpoint of "national regions" in Europe, the destabilising and changing effect of direct democracy is a strategically important opportunity, as it can serve to bring about changes in public law (autonomy, self-government). In this case, instability should be interpreted instead as a "transition", the transformation of the framework of public law, in which the procedures of direct democracy are brought to the fore. Regarding this, the conclusion of the Hungarian Constitutional Court should be quoted: "direct exercise of powers is a special form of exercising popular sovereignty that, in the exceptional cases where it is introduced, should take priority over the exercise of powers by representation".

Realising that the bureaucracy represented by the multi-level governance in the EU is viewed by European citizens as a lack of democracy and an illegitimate feature of governance, the European Union also tries to remedy this situation through the corrective instrument of direct democracy.

The European Citizens' Initiative was first introduced in the Treaty of Lisbon which provides that "not less than one million citizens who are nationals of a significant number of Member States may take the initiative of inviting the Commission, within the framework of its powers, to submit any appropriate proposal on matters where citizens consider that a legal act of the Union is required for the purpose of implementing the Treaties". On this basis, an EU regulation was adopted according to which the initiative must be launched by a citizens' committee composed of at least 7 persons who are residents of at least 7 different Member States. Members of the European Parliament may not be included in the number of the members of the committee. The minimum number of supporters per Member State is calculated on the basis of the number of Members of the European Parliament of the given country (the number of the elected Members of the European Parliament multiplied by 750).

Prior to collecting statements of support, the organisers must request the registration of the initiative in one of the official languages of the European Union via the online registration system set up by the European Commission. The Commission must respond to this request within two months and may refuse to register the request if: a) the composition of the citizens' committee does not comply with the regulations or no representative has been designated; b) the submission of the requested proposal for a legal act manifestly fall outside the framework of the Commission's powers to submit a proposal for a legal act of the Union for the purpose of implementing the Treaties; c) the initiative is manifestly abusive, frivolous or vexatious; d) the initiative is manifestly contrary to the values of the Union. After registration, the organisers may request that the proposed initiative be included in the register in other official languages of the Union.

Statements of support may be collected in paper form or electronically; Member States may introduce different models for the statement of support. The competent authorities of each Member State are responsible for the verification and certification of the collected statements of support and must issue a document certifying the number of valid statements of support within 3 months.

After collecting the statements of support, the organisers must submit their initiative to the European Commission for substantive review and decision, and the Commission must decide within 3 months if it intends to take any action. Basically, the Commission may choose, giving appropriate reasons, from the following three options: a) to submit a proposal for a new legal act to the Council of the European Union and the European Parliament; b) to request an impact assessment; or c) to take no action.

As can be seen, EU citizens' initiatives are subject to fairly stringent formal and procedural constraints. However, these initiatives may prove beneficial for "national" regions to have their special powers recognised if this issue can be phrased as a common European question.