From a comparative political perspective, island jurisdictions stand out as having exceptionally democratic regimes in comparison with mainland or continental polities. Irrespective of their geographical location, levels of economic development or constitutional status (sovereign or nonsovereign), with only a few exceptions, island jurisdictions around the world have democratic political institutions. While some scholars have explained this relationship on the basis of colonial history, international political dynamics or the geographical isolation and remoteness that stem from being an island, others have argued that the smallness of islands explains the correlation, meaning that size is actually the causal factor that explains the prevalence of democratic governance. In this paper, an original account of the relationship between islandness and democracy is provided, foregrounding the informal political dynamics that can be observed in island territories around the world. To do this, the specific nature, dynamics and varieties of democratic governance in island jurisdictions are examined. Most island nations have adopted the political‐institutional framework of former colonial powers or metropolitan states, and these have only rarely been modified to suit the (small) island context. Yet due to the greater social intimacy and interconnectedness of island societies, these formal institutional frameworks are likely to be complemented or overshadowed by a set of powerful informal political dynamics, which means that a large part of the political process is conducted outside of the official political channels. These informal politics have mixed effects on the quality of democratic governance, as face‐to‐face relations offer both opportunities and drawbacks for democratic transparency and accountability. The last analytical section of the paper examines the interaction between formal institutional structures and the prevalent informal political dynamics in island territories, and argues that this interplay perhaps provides the best explanation for the survival of democratic institutions in island territories.