Luxembourg is an indirect democracy with a parliamentary monarchy.
A constitutional monarchy ( also known as a parliamentary monarchy ) is a form of monarchy in which the sovereign exercises their authorities in accordance with a written or unwritten constitution . Luxembourg . As a representative democracy with a constitutional monarch , it is headed by a Grand Duke , Henri , Grand Duke of Luxembourg , and is the world 's only remaining grand duchy . Representative democracy ( also indirect democracy , representative republic , or psephocracy ) is a type of democracy founded on the principle of elected officials representing a group of people , as opposed to direct democracy .