Un gobierno que se dice llamar democratico

Un gobierno que se dice llamar democratico
 

"un gobierno que se dice llamar democratico"
First, the correct translation is which: "a government that calls itself democratic", or "a government that is called democratic" ?

Second, why the use of the two verbs: decir and llamar? In English, we can get away with only one: "call itself"

Thirdly, is "se" reflexive on "dice" or on "llamar"?

You're dealing with an idiomatic expression, so won't be able to make sense of the individual words.

"que se dice llamar" = so-called

Translation: "a so-called democratic government"

got it.

un gobierno que se autodenomina democrático = un gobierno que se autodefine como democrático = a government / a regime that calls itself democratic

un gobierno que se precia de democrático = un gobierno que blasona de democrático = a government/a regime that prides itself of being democratic

un gobierno que se dice democrático (not "se dice llamar") = something in the middle of the previous examples: decirse is literally close to autodenominarse but it conceals the criticism intended by using preciarse or blasonar.