I'm basically with you on most of this. And Aristotle. We have gotten locked into a particularly dysfunctional attempt at implementing democracy.
One point to disagree on: "Democracy in any form — including the superior Chinese form — is still the idea of self-government. It is still based on the illusion of self..."
That's not the etymology. "Demos" is "the common people," or "the populace." Since the root is Greek it would originally have referred to the populace or the common people of a Greek state. Point being, it's a collective identifier. The hyper-individualistic alleged democracy that western colonizer nations (especially the USA) have locked in as the (TM) one you identify needs a different name, because it is clearly not "governance by the common people." What's ancient Greek for "pathologically hyper-differentiated individuals?" It would be that "-ocracy."