Prosecution is not equal to being guilty. In fact, during prosecution, he is still presumed innocent, only a trial that comes after the prosecution can find him guilty. "Innocent until proven guilty" is a basic tenet of jurisprudence, even in many non-democratic societies. For a democratic society, it is a necessary condition.

That Netanyahu still walks free is a consequence of a) Israel not being party to the ICC, therefore not bound to obey their prosecutors' requests and b) the countries he travels to not being party to the ICC either or c) the ICC member states he travels to guaranteeing diplomatic immunity as is tradition for an invited diplomatic guest.

c) is actually a problem, but not one of Israel being undemocratic, but of the respective member states being hypocrites for disobeying the ICC while still being members.