The recent debates on the impact of globalization upon the nation-state increase among political scientists in the past decade. However, there still lacks systematic investigation on the relation between globalization and democracy. This article aims to fulfill this theoretical gap. Firstly, democracy is analyzed as three forms: liberal, social democratic and deliberative democracy. Given the different forms, the development of modern democracy is based on the territorial-bounded nation-state. The impact of globalization on democracy is channeled via the nation-state. This article argues that the increasing trend of globalization will strengthen the liberal democracy while weaken the social democracy. There results in a dilemma for the future of democracy. Whereas the increasing social inequality and structural unemployment is accompanied by the globalization, the foundation of social democracy as a form of risks compensation for the disadvantaged has been eroded. This article suggests that the alternative solution lies in the emerging global civil society and a redefinition of democracy. Theoretically, the meaning of democracy is broadened to the global deliberative democracy. Practically, this emerging global public sphere could contribute to the formation of transnational government and agenda setting of global issues.