I am a reasonably large Charlie Munger fan (read all the bios of him and Buffett, read the Bevelin books, read Poor Charlie's) but the guy has the most phenomenal blind spots of any person alive because, bluntly, he isn't that well-read. He has read very deeply in one area (if you look at his book recommendations, it is like the Amazon best sellers for rich elderly people who went to college in the US, studied sciences but never really thought about anything else) but he appears unaware of the limits of knowledge, and is exceptionally superficial about stuff like politics (the stuff with the UCLA dorm also highlights this, he has written a lot of sensible stuff, and a lot of stuff that would do well in standup).
Plato wrote about all of this stuff, he was of the same opinion (philosopher kings), and then spent most of life finding out why that didn't work (and was, as a result, sold into slavery towards the end of his life). This came up again in the Enlightenment. The perceived fault of democracy is the strength: it is strong because "everyone takes turns". You significantly reduce your upside, but you significantly reduce your downside too. The US has benefitted hugely from founders who not only understood democracy well, but understood the problems with dictatorship.
Also, it is worth saying that LKY's son now runs the country. It isn't a democracy, are we seriously saying that the country was scoured for the best people and it just turned out the best guy was the son of the last guy? Seriously? LKY's achievements were great, he was a great leader but there is a lot wrong with the country (it runs on slave labour) and has the highest level of political weakness possible (China is a perfect parallel: Deng was a great leader, but he didn't solve any of political issues and assumed the CCP would always lead by consensus, Xi has made himself permanent leader...this is why you have a balance of powers/strong constitution, this is exactly why).