Many countries include 'Democratic' or 'People's' in their names, even though they are not democratic and do not serve their people. Examples: Democratic People's Republic of Korea Lao People's Democratic Republic People's Democratic Republic of Algeria Democratic Republic of the Congo And German Democratic Republic (East Side) in 1949–1990. None of these states are democratic, power and wealth are concentrated in the hands of a small ruling elite. Who are they fooling with these names?
The Marxist view is that capitalist countries are anti-democratic because the bourgeois class has the power to both sway elections and exert influence over people's lives outside of the political sphere. True democracy means a state that actually represents the people's interests, which in turn requires suppressing the political influence wielded by the rich.
The liberal view is that the state's capacity for repression is uniquely dangerous, and so freedom just means being able to act without interference from the state (not from private entities), and what determines whether a state is free or not is whether it adheres to certain principles. In that view, a Marxist state that represses the bourgeoisie is violating the principle against political repression, and is therefore not democratic.
On the other hand, Marxists point to things like capitalist states repressing strikes to show that in those countries, the state is also willing to act on behalf of the people who control it, and that that this whole idea of a state being constrained by "principles" or "norms" and somehow being independent of class conflict is nonsense and just not how politics works. This is because Marxists view ideas as being the products of material conditions and material interests, and so any such "norms" or "principles" are only as strong as whatever class interests are invested in upholding them.