In the modern sense, I think most people would take the word “democracy” to include universal suffrage - at a minimum, all adults born or granted citizenship there should have the equal right to vote for it to be considered a democracy.
In practice, Israel has substantial control over the entire region from the Mediterranean Sea to the Jordan River, between Egypt and Lebanon (that is not to say that they should, just the reality) - in the sense that anyone in that area’s lives are significantly controlled by Israeli government decisions, and the Israeli government and military operates over that entire area.
So the minimum bar for it being a democracy is that adults - including the people with ancestral ties to the area that it controls - get an equal say in the governance. That is clearly not the case, and has not been for quite some time; it not being a democracy is not a recent development (maybe it’s never actually been a true democracy).
Starlink is a constellation of low-earth orbit (LEO) satellites, not geostationary satellites. That means that the ground station (i.e. subscriber equipment) talks to one satellite as it comes into view, and over time that satellite moves across the sky, and they switch to another satellite. This means the latency is highly variable as the distance changes, but at its lowest is much lower than a geostationary satellite since it is far closer.