Was not aware of the latency issue. But that's something that can surely be overcome.
I haven't checked. I may have been already.
As a support structure providing more open communication, the fediverse might help with that. It in itself is not, and is not supposed to be, democratic. It's its own wierd mix of dictatorship with the option for the community at large to wrest control away from current leaders, should they want to.
As of now, preferring "going local" would hinder more than help with irl democracy. There just aren't enough users. If you divided them you'd end up with a ton of tiny inactive communities, rather than a bigish pretty lively one.
And it's not an either or. Or you can have big communities AND small local ones.
Smaller communities are also something that happens naturally, and is already happening naturally. The reddit exodus was the spark for a ton of new niches on lemmy hitting critical mass.
There is also plenty of non-english, more local activity already. You just might not be seeing it due to your language settings.