Of course, those tests shouldn't be that ambiguous, but if they were phrased a bit more clear, these would be very simple. At the same time, English has changed in the last 50 years. That phrasing might have been common back then.
It's obviously not the optimal system to ensure that the best possible decisions are taken, it's not designed for that.
It's more about allowing everyone to have a say in their destiny, to decide together what "best" means, even if it's somewhat objectively wrong.
Of course, you need significant balancing mechanisms to ensure that bad decisions are not too common. So you don't let the people micromanage everything and you build the system such that different parts of it keep each other in check. Sometimes it goes too far and the population has very limited choice over what's going on, sometimes it doesn't go far enough and the system is incompetent and chaotic. Often it's both, it's a hard problem.
But there's obviously better human organizational systems to take the right decisions towards a given goal or metric. That's why companies are not democratic, they are better at optimizing wealth creation (or whatever other metric), but we keep them sandboxed within the big-picture, keeping monopolies to a minimum (particularly the monopoly on violence, the core leverage of any government) so that they have a somewhat limited influence on people's lives. The military is not democratic either, neither is the justice system, nor many other performance-critical systems, they are more optimized to take better decisions at the expense of giving a choice to everyone they impact.