Democratic government of the 21st century is believed to head towards more agility, leanness, responsiveness, accessibility, openness, and participation than its predecessors in the 20th century. However, at the same time democratic government has to cope with new challenges and trends, which are unprecedented in their potential impacts (positive and negative) on society at large. These challenges are intertwined and interact. The article discusses the interacting challenges of market regulations and deregulations, the third industrial revolution, sustainable levels of government spending and debt financing, theevolutionofsmartgovernment, andtheemergenceofnewmodelsofparticipation. Informationandcommunication technologies seemingly play a pivotal role in enabling the emerging shape of 21st century democratic government. They also appear to be instrumental in addressing and coping with the new challenges and trends. Consequently, electronic government research needs to fully engage in studying these complex phenomena and help both theory and practice understand the choices and potential outcomes.