In many online communities, pretty much the only thing that users are allowed to is to vote on “features” — and almost all are technical features, not social ones. Community managers tend to downplay the importance of allowing their members to participate in the decision processes regarding social issues. In Second Life, for instance, we can vote for a feature, but not against it; features are a list of dozens of thousands, making it impossible to track them down and vote for them; anyone can submit a feature, but implementation is up to Linden Lab (and so is prioritisation)
“Community managers” often act simply as “moderators”, interpreting a list of “do’s” and “don’ts” according to their whim. Most often their decisions are not reversible. More complex governance sites like Wikipedia have the ability to review a moderator’s decision, but the overall number of “moderators” tends to remain small. They’re not democratically elected, although it’s technically possible to kick them out. This has been the model for pretty much every “online community”, where, in most cases, company employees act as moderators according to corporate guidelines.
The issue here is: how can an online service with its own community be not only participative, but select their own rules via a democratic process, and be able to enforce it? If a company/organisation is behind the community, how can the decision made by community users override the organisation’s own policies? An online game, “A Tale in the Desert II”, allowed players to actually vote on (some) policy rules, and there was a process to create proposals and raise awareness for it. Most game rules and policy rules could be changed that way.
Virtual communities can, however, be completely run as democratic online communities, where all decisions are made by the members. There are some subtleties to deal with. For instance, if the online community is a forum, there is always someone who has access to the administration role. How can the community kick the admin out? If the admin is not easy to remove, then it’s not a true democracy — only the opinions of those who side with the admin will be tolerated.
In Second Life, there is a further difficulty: to be able to enjoy your private space, you need to lease land from Linden Lab. Land is leased individually. So that means that the landowner sets the rules. The community can organise itself, and possibly even vote on many things — a lot of Second Life communities work that way — but dealing with land ownership is hard. The Confederation of Democratic Simulators has a solution, but it’s the only organisation in Second Life which uses it — it still requires a lot of trust.