If I stop my neighbor from building an extension that's 1v1. Doesn't map easily to "democracy". Now, if I and the neighbor on the other side stop our middle neighbor building an extension... it's sort of democracy? The majority decides. But what if everyone else on our street wants to allow it? Now blocking is undemocratic. Thoughout all of this my neighbor might insist they don't care what anyone thinks and they should be able to do whatever they want with their own land.
The citizens of a particular city neighborhood blocking development is democratic when looked at up close and undemocratic when looked at from afar. There aren't any easy answers and anyone pretending there are is fooling themselves.
Democracy is not an easily defined concept in practice.
In theory, Democracy is simply the idea that the government is formed from the will of the people... but there is no single will of the people. How do you decide, then, what the will of the people is?
Many of us have grown up with the idea that 'majority rules' is democracy, but why? What makes 51% a magic number?
Most modern democracies don't like the idea of a majority suppressing a minority, so we put restrictions on what the majority can do. Is that undemocratic? Is the Bill of Rights undemocratic because it blocks the will of the people?
The problem with your example, and the problem in real life, is that people are making decisions at too low of a level and property rights (never mind the needs of society) are being overridden. They end up voting on how something directly affects them, and place little to no consideration for the rights of others. They push the problem onto someone else, on people who have less of a voice in the democracy.
You're right about there being no simple solution. Even voting on higher level issues (like providing affordable housing) is perilous. Deciding upon something without specifics just opens up the floodgates for abuse. I've seen housing built on land unsuitable for construction. I've lived in a couple of neighbourhoods that narrowly escaped being razed for highways (to the point where parts were razed and some infrastructure was built).
Even long term urban planning, something specific enough for voting on and distant enough to avoid being personal, has proven to be less than successful.
The whole thing gets complicated because people end up not being willing to hash out exactly what they want, and what others want, and how to work out compromises.
And general ideas always lose out to specific ones (which is why you can have an entire city that is pro-affordable housing but each example thereof is strongly fought against).
Two wolves and a sheep voting on what's for dinner is democracy, illustrating a common failure mode of the worst form of government except for all of the others.
Claiming "DEMOCRACY!" doesn't prevent people from having rights. Rights are not about majority rule but about the kind of place "people" (sometimes a minority) think "people" (often a minority) deserve to live in.
In this case, it is fair for the middle neighbor's outcome to depend on more than his two direct neighbors. And it's also fair for the middle to balance their own wants with the ones of their neighbors. But for sure everyone gridlocking each other is not a solution for progress.
I usually use "democracy" to describe a situation where there are regular transfers of power through reason, persuasion, and cooperation and not through violence or the threat of violence. I'm not sure that it applies to this case about your neighbor, unless you are stopping them through a threat of violence, in which case it is certainly undemocratic.
If I stop my neighbor from building an extension that's 1v1. Doesn't map easily to "democracy". Now, if I and the neighbor on the other side stop our middle neighbor building an extension... it's sort of democracy? The majority decides. But what if everyone else on our street wants to allow it? Now blocking is undemocratic. Thoughout all of this my neighbor might insist they don't care what anyone thinks and they should be able to do whatever they want with their own land.
The citizens of a particular city neighborhood blocking development is democratic when looked at up close and undemocratic when looked at from afar. There aren't any easy answers and anyone pretending there are is fooling themselves.