This chapter focuses on the school and school system in an established democratic setting, and tries to explore the reality of the democratic movement and of democratic processes in school education in Australia and to take some assessment of the costs and benefits which may accrue to the school and school system in such a setting. It provides greater understanding of the costs and benefits of the democratic school. The chapter highlights some of the dilemmas and paradoxes which inevitably arise when issues of democracy, participation, individual rights and freedoms are considered in the context of a publicly funded and government-controlled education system. From an administrative perspective, schools and teachers in the government system can be viewed not just as public institutions and public employees, but as ‘agents’ or ’servants’ of society. School financing has been centrally determined with a range of specific grants to schools to cover various aspects of the normal day-to-day operations.