Liberal democracy traces its origins—and its name—to the European 18th-century, also known as the Age of Enlightenment. At the time, the vast majority of European states were monarchies, with political power held either by the monarch or the aristocracy. The possibility of democracy had not been a seriously considered political theory since classical antiquity and the widely held belief was that democracies would be inherently unstable and chaotic in their policies due to the changing whims of the people. It was further believed that democracy was contrary to human nature, as human beings were seen to be inherently evil, violent and in need of a strong leader to restrain their destructive impulses. Many European monarchs held that their power had been ordained by God and that questioning their right to rule was tantamount to blasphemy.
These conventional views were challenged at first by a relatively small group of Enlightenment intellectuals, who believed that human affairs should be guided by reason and principles of liberty and equality. They argued that all people are created equal and therefore political authority cannot be justified on the basis of "noble blood", a supposed privileged connection to God or any other characteristic that is alleged to make one person superior to others. They further argued that governments exist to serve the people—not vice versa—and that laws should apply to those who govern as well as to the governed (a concept known as rule of law).
Some of these ideas began to be expressed in England in the 17th century. There was renewed interest in Magna Carta, and passage of the Petition of Right in 1628 and Habeas Corpus Act in 1679 established certain liberties for subjects. The idea of a political party took form with groups debating rights to political representation during the Putney Debates of 1647. After the English Civil Wars (1642–1651) and the Glorious Revolution of 1688, the Bill of Rights was enacted in 1689, which codified certain rights and liberties. The Bill set out the requirement for regular elections, rules for freedom of speech in Parliament and limited the power of the monarch, ensuring that, unlike much of Europe at the time, royal absolutism would not prevail. This led to significant social change in Britain in terms of the position of individuals in society and the growing power of Parliament in relation to the monarch.
By the late 18th century, leading philosophers of the day had published works that spread around the European continent and beyond. These ideas and beliefs inspired the American Revolution and the French Revolution, which gave birth to the ideology of liberalism and instituted forms of government that attempted to apply the principles of the Enlightenment philosophers into practice. Neither of these forms of government was precisely what we would call a liberal democracy we know today (the most significant differences being that voting rights were still restricted to a minority of the population and slavery remained a legal institution) and the French attempt turned out to be short-lived, but they were the prototypes from which liberal democracy later grew. Since the supporters of these forms of government were known as liberals, the governments themselves came to be known as liberal democracies.
When the first prototypical liberal democracies were founded, the liberals themselves were viewed as an extreme and rather dangerous fringe group that threatened international peace and stability. The conservative monarchists who opposed liberalism and democracy saw themselves as defenders of traditional values and the natural order of things and their criticism of democracy seemed vindicated when Napoleon Bonaparte took control of the young French Republic, reorganised it into the first French Empire and proceeded to conquer most of Europe. Napoleon was eventually defeated and the Holy Alliance was formed in Europe to prevent any further spread of liberalism or democracy. However, liberal democratic ideals soon became widespread among the general population and over the 19th century traditional monarchy was forced on a continuous defensive and withdrawal. The dominions of the British Empire became laboratories for liberal democracy from the mid 19th century onward. In Canada, responsible government began in the 1840s and in Australia and New Zealand, parliamentary government elected by male suffrage and secret ballot was established from the 1850s and female suffrage achieved from the 1890s.
Reforms and revolutions helped move most European countries towards liberal democracy. Liberalism ceased being a fringe opinion and joined the political mainstream. At the same time, a number of non-liberal ideologies developed that took the concept of liberal democracy and made it their own. The political spectrum changed; traditional monarchy became more and more a fringe view and liberal democracy became more and more mainstream. By the end of the 19th century, liberal democracy was no longer only a "liberal" idea, but an idea supported by many different ideologies. After World War I and especially after World War II, liberal democracy achieved a dominant position among theories of government and is now endorsed by the vast majority of the political spectrum.
Although liberal democracy was originally put forward by Enlightenment liberals, the relationship between democracy and liberalism has been controversial since the beginning and was problematized in the 20th century. In his book Freedom and Equality in a Liberal Democratic State, Jasper Doomen posited that freedom and equality are necessary for a liberal democracy. The research institute Freedom House today simply defines liberal democracy as an electoral democracy also protecting civil liberties.