Neighborhood-representing organizations (NROs) are generally viewed as the most authentic form of citizen participation and local democracy. In this article, I question how democratic NROs actually are, both on the local level (participatory democracy) and in the external arena (representative democracy). I present a new conceptual model of the components of democracy in neighborhood organizations. A review of the literature is presented within the context of this model to show to what extent NROs are democratic. The findings indicate that the level of democracy in NROs is questionable and that the "iron law of oligarchy" is valid for this type of organization. The problem of low participatory and representative democracy is addressed, and implications for research and practice are discussed.