Excellent post, XO. The nub of it, and the simple answer to plane's question, I think, is:
<<Democracy developed in the US, Switzerland, and the Netherlands because there was no single religion dominant. In Europe, people were tired after centuries of religious wars. England had a Civil War between Catholics and Protestants, and then between Cavaliers (Church of England) and Roundheads (dissenters).>>
English "democracy" (civil liberties, more properly) developed out of the religous wars as you stated. People got sick of the constant rounds of beheadings, burnings at the stake, hangings, etc. and the worst of it was, no side ever stayed on top. Even the most partisan people finally adjusted to the idea that it could be their turn next. So the idea of religious tolerance (one of the civil liberties) developed. Freedom of speech probably had a more complex intellectual history.
The ideals of democracy were more complex and you'd probably need a real scholar to explain it all, but I'll take a stab at it: it was familiar to classical scholars from the experience of Greece in the 4th Century BC and it started to take off in England with the rise of the middle class, whose wealth, in contrast to the old aristocracy, was based on money rather than on land. This middle class could be taxed by the sovereign to pay for wars which were directed by the King and his barons, in which the middle class ("mere" merchants) had no say. As the sovereign's demands for money intensified, the middle class looked more and more to Parliament as their protection, which culminated in the English Civil War. The whole mess ended with the nominal restoration of the Stuart monarchy but as a constitutional monarchy keenly aware of the Parliamentary limits on its power.
English democracy was basically a wealth-protection scheme of a new merchant class and represented one more stage in the slow decline in the power of the landed aristocracy. Originally the franchise was tightly restricted, so the only voters were the middle classes themselves, but they sure as hell outnumbered the landed aristocracy and controlled a hell of a lot more liquid wealth, so it worked pretty well for them. It was only later, in the 19th Century, that the franchise was extended to the rest of the country so as to make it truly "democratic," and that was probably due to the influence of philosophers like Jeremy Bentham and John Stuart Mill, as well as to the example of the American and French Revolutions.
The development of democracy and civil liberties in England (which were more or less just copied to America by its English settlers and further expanded upon there) depended on various local factors: the original feudal system, which resulted in a balance of power between the monarch and his barons, ultimately codified in a series of Magna Cartas, the customs and traditions of the Germanic tribes which had settled England, the rise of a monied middle class and its need to protect its assets from the demands of the older, land-owning aristocracy, the Protestant Reformation and the subsequent wars of religion, the utter savagery of which ultimately threatened everyone, since there was never a clear winner, the philosophers of the Enlightenment and post-Enlightenment, and the events of the French and American Revolutions.
I think only some of the events find parallels in Arab and Iraqi history - - the savagery of the wars of religion come first to mind. But an Islamic tradition lacks a rapacious aristocracy living off the labours of the proletariat. The Islamic state was always financed by a zakat, or tithe, that all members of the society contributed. A sort of "flat tax," in fact. So the need for a supreme Parliament to protect the wealth of the middle class never arose. The concept that God was the supreme ruler, not some hereditary monarch, produced less incentive for popularly elected government because people were conditioned to submit to a theocratic ruler, asking only that he be just and fair.
I dunno, plane asked a legitimate question, but you need to write a book to answer it. I'm not the guy to write the book. These were just a few of my thoughts on the subject. Obviously, I've only just scratched the surface. But I do not believe there is a made-in-America one-size-fits-all solution that wills solve Iraq's problems. That's just simplistic bullshit, typical of the Bush supporters, too dumb to even realize the dimensions of the problem.
The Bush adminsitration itself, BTW, does not have this problem. They seek only to impose a puppet government on Iraq similar to the one they once imposed on Iran, which will guarantee a steady supply of oil and prevent the people of the region, the true owners of the oil, from exercising any real control at all over it. A fake democracy similar to Egypt's would be ideal. They make up the fairy tale of being there "to bring democracy" and their supporters are left to struggle with the essentially bogus issue of, "well, OK, just how do we go about doing that?"