The article deals with evolution of political theory and state and efforts to activate democracy, especially in the Third World countries still operating in a feudal/monarchic manner, as against liberal/progressive democracies in Anglo-American-Scandinavian countries. This needs to re-energise existing institutions of governance through much-needed innovations, leading to transformations in the respective roles of state, market and civil society to ensure responsibility/accountability, transparency and reduction in fiscal deficit in national economy. While liberal/progressive agenda of continuing reforms for common welfare must be dynamically pursued to accomplish timely innovations in governance, minimising exclusive production, putting huge burden on economy and reducing per-capita share, may help-reinvent an active democracy, thereby further expanding freedom of choice and opportunities to all in the era of digitalisation preceded by liberalisation and globalisation.