Was democracy present in India before British colonization?

Democracy evolved out of the notion that if the people who pay the taxes decide how that money should be spent, then- provided people are rational- tax money will be spent on 'public goods' which enable 'endogenous growth' which involves decentralised innovation and enterprise. Thus the Democracy becomes richer and stronger than its autocratic rivals.

Britain became the greatest Imperial power the world has ever seen because, in the Seventeenth Century, it decided to keep the Navy under the control of the tax-payer not the King. Thus the profits from its burgeoning naval might remained in private hands and though there was a lot of corruption, in an emergency, or when an opportunity arose, tax payers would agree- through their elected representatives in Parliament- to pay more in the short run so as to be a lot richer in the long run.

India did have 'tribal republics' (janapadas) which had some 'democratic features', however Indian Empires could not be based on a particular tribal identity because of the vastness of the land. It also did have a 'Guild' (Shreni) system whereby merchants and artisans had some countervailing power over monarchs. The same was true of 'caste' brotherhoods (biradaris) more especially those of dominant cultivator castes. Speaking generally, most of India was a segmentary society at the micro-level- i.e. relatively autonomous but highly differentiated- with an overarching, surplus extracting, Imperial administration whose strength fluctuated with economic conditions.

India did have some promising 'Prussias'- i.e. tribal/caste based warlike monarchies which might have united the country- but they weren't developing naval power and thus could never really compete with a global naval power. Even China started to succumb because it ignored the navy. Strangely, India continues to neglect its ports and merchant marine which is why, unlike Japan, South Korea and now China, it will remain poor. The Brits could dominate India because the made the profit of exports and imports and also could move troops around by sea. Later they built railways and paid off or crushed internal opposition. Still- like other Empires in India's past- British power was bound to crumble because sooner or later the people wouldn't be able to pay enough tax to finance the Imperial canopy. Thus some far-sighted British administrators wanted to bring representative local government to India so that small towns could gain 'endogenous growth' by taxing themselves for public good provision. In other words, the British saw that some limited democracy at the local level was necessary to prevent the same thing happening to their Empire in India as had happened to the Mughals or to the Portuguese.

The Indians did not want to pay taxes in return for having elected representatives who would set a budget. They also did not want to be ruled by anybody. Why? They were suspicious of both 'leaders' and officials. The genius of Mahatma Gandhi was that he promised the Indians an anarchic utopia where there would be no taxes and no officials. Thus, in theory, people could vote for the Congress party without having to pay taxes. However, this also meant that India failed to develop after Independence. In the short run 'begging bowl' diplomacy could give the illusion of progress but longer term it became apparent that the poor can only lift themselves up if they pay a little in tax and elect smart people to decide how to spend it best.

Megasthenes (ca. 350 – 290 BC) in his "Indica" mentions democracy several times.

For example,

The men of greatest learning among the Indians tell certain legends, of which it may be proper to give a brief summary.a They relate that in the most primitive times, when the people of the country were still living in villages, Dionusos made his appearance coming from the regions lying to the west, and at the head of a considerable army. He overran [S. 37] the whole of India, as there was no great city capable of resisting his arms. 26 The heat, however, having become excessive, and the soldiers of Dionusos being afflicted with a pestilence, the leader, who was remarkable for his sagacity, carried his troops away from the plains up to the hills. There the army, recruited by the cool breezes and the waters that flowed fresh from the fountains, recovered from sickness. 37 The place among the mountains where Dionusos restored his troops to health was called Mēros ; from which circumstance, [S. 38] no doubt, the Greeks have transmitted to posterity the legend concerning the god, that Dionusos was bred in his father's thigh.b 28 Having after this turned his attention to the artificial propagation of useful plants, he communicated the secret to the Indians, and taught them the way to make wine, as well as other arts conducive to human well-being. 29 He was, besides, the founder of large cities, which he formed by removing the villages to convenient sites, while he also showed the people how to worship the deity, and introduced laws and courts of justice. 30 Having thus achieved altogether many great and noble works, he was regarded as a deity and gained immortal honours. It is related also of him that he led about with his army a great host of women, and employed, in marshalling his troops for battle, drums and cymbals, as the trumpet had not in his days been invented ; 31 and that after reigning over the whole of India for two and fifty years he died of old age, while his sons, succeeding to the government, transmitted the sceptre in unbroken succession to their posterity. 32 At last, after many generations had come and gone, the sovereignty, it is said, was dissolved, and democratic governments were set up in the cities.

It is believed that by name Dionysus he means Shiva or Indra.

They further assert, that Heraklēs also was born among them. 34 They assign to him, like the Greeks, the club and the lion's skin. He far surpassed other men in personal strength and prowess, and cleared sea and land of evil beasts. 33 Marrying many wives he begot many sons, but one daughter only. The sons having reached man's estate, he divided all India into equal portions for his children, whom he made kings in different parts of his dominions. He provided similarly for his only daughter, whom he reared up and made a queen. 80 He was the founder, also, of no small number of cities, the most renowned and greatest of which he called Palibothra . He built therein many sumptuous palaces, and settled within its walls a numerous population. The city he fortified with trenches of notable dimensions, which were filled with water introduced from the river. 37 Heraklēs, accordingly, after his removal from among men, obtained immortal honour; and his descendants, having reigned for many generations and signalized themselves by great achievements, neither made any expedition beyond the confines of India, nor sent out a n y colony abroad. 38 At [S. 40] last, However, after many years had gone, most of the cities adopted the democratic form of government, though some retained the kingly until the invasion of the country by Alexander.

It is believed that he calls Krishna by the name Herakles.

I definitely remembered there were several republic-style governments in ancient Indian history. One example that I managed to dig up in Wikipedia was Kambojas, which the Mahabharata described as a kingless country where people elected their chiefs.

Kambojas was originated from a ksatryia tribe, and it's interesting that many of the ancient republics in Indian history were usually ksatriya in origin.

Also interesting to note is that the republican tradition of the Kambojas people continue even under the Mauryan empire.

During the period of Raja Raja Chola 1110 AD at south india, People used to select the village leaders by voting. Chola Government

First of all, reading history depends strongly on what glasses you put on when you do so. The level of satisfaction regarding the answer to your question will therefore depend very strongly on what you think of when you say "democracy". This is true when you look at a polity in the past as well as the present: in order to compare before with after, you need to ask yourself whether there is any proper democracy today in India or elsewhere in the world, because it is what your question implies. Some may be satisfied with the self-appellation of a state, say The Democratic Republic of Congo, to conclude that state is a democracy. (n.b. I am not making any critical judgment of Congo here, I'm just using the name as an example.) So you need to consider what criteria will define a conclusive democracy: is it an election process, is it representativity, is it freedom and civil rights?

Second, Indian history is a real headache to South Asian students like myself, because the further you go back in time, especially before the Sultanates (app. 1200 AD) there is too little documentation to allow one to say much about what really happened. Some chunks of Indian history (e.g. the Kushanas) are reconstructed from displaced mints and which, if you don't take it at face value (notice the pun), are utter speculations.

Some of the earliest evidences of civilisation in South Asia (here I take the word "India" to its broader sense) is what we call the Indus civilisation, about which there is little to say regarding the political system, because there is really no literature to comment what happened then. Another old source are the Vedās, which are more a liturgy than anything and give very little insight on the social and political structure of the society from which it emerged. But if you consider the varṇās (basic castes) described in these texts, then you can already reduce the chances of there being democracy, because the varṇa-system is inherently a hierarchical and claiming the inequality among individuals, based on their respective birth. The Vedās however, are not representative of South Asia (they really just represent themselves). Yet we can find the following:

"Political development in the Late Vedic age was of equal importance to the social and economic development which has been discussed so far. A new type of kingship emerged in the small territories of the Gangetic plains. Kings, even hereditary ones, were mentioned already in the Early Vedic texts, but their power was always limited as they had to consult either a council composed of all the male members of the tribe (vish or jana) or an aristocratic tribal council (sabha or samiti). Some tribes were governed by such councils only and did not have kings at all. Indian historians of a later age pointed proudly to this ancient ‘democratic tradition’. But this Early Vedic tradition of aristocratic tribal republics was eclipsed in the Late Vedic period. A new type of kingship emerged after the transition from nomadic life to settled agriculture."---Kulke and Rothermund, 2004, p.43

Atharvaveda may have played an important role in this movement. It is interesting to note that Buddhist texts contain many references to powerful tribal republics which existed in the east in the fifth century BC while the Brahmana texts which originated in the western part of Vedic settlements refer mostly to kingdoms.---ibid, p.50

At a later stage (let's say 600 BC, again there is a lot of debate regarding early history of India and dating), we find societies which are again coined "republics":

From the numerous small tribal kingdoms (janapada) sixteen major ones (mahajanapada) emerged in the fifth century BC (see Map 1.2). The emergence of these principalities had a lot to do with agrarian extension, control of trade routes and a new and more aggressive type of warfare. The texts do not necessarily always use the same name for each of these mahajanapadas, but it is possible to list the most important ones which have also been documented by archaeological research. These are: Kamboja and Gandhara located in northern Pakistan; Kuru, Surasena (capital: Mathura) and Panchala in the western Doab; Vatsa (capital: Kausambi) in the eastern Doab; Kasi (capital: Varanasi) and to the north of it, Koshala; Magadha to the south of Patna and the tribal republics of the Mallas and Vrijis to the north of it; and farther east, Anga, near the present border between Bihar and Bengal; in central India there was Avanti (capital: Ujjain) and to the east of it Chetiya. The hub of this whole system of mahajanapadas was the Ganga–Yamuna Doab and the immediately adjacent region to the east. The origins and the internal organisation of these mahajanapadas are still a matter for speculation. As the earlier tribes were usually rather small, all the inhabitants of a mahajanapada could not have belonged to the tribe that gave it its name. Therefore, they must have been confederations of several tribes. *---Kulke and Rothermund, 2004, p.52-53 (emphasis is mine). *

The Mahajanapadas were subsumed into the Magadhan empire and later the Mauryan empire. The imperialistic nature of these societies also is subject to debates: to what extent did the emperors really subdued the (vague) area they supposedly control? Perhaps control over the major trade routes and the acquiescence of subordinate polities would have been enough to allow such empires to exist. This does not say much about the internal structure of subordinate states, in which some form of democracy could have existed (mere speculation).

An eminent source of information about politics and statecraft in early Indian history is the Arthashāstra, attributed to Kauṭaliya, which may have worked at the court of Chandragupta Mauriya (founder of the Mauriya empire). I remember (pardon my chaos and short term memory, but I can't find quotes exactly to corroborate what I am saying here) this source mentioning the existence of republics, but the document mostly reflect kingship and aristocracy, more than anything really. Kulke and Rothermund warn though:

"the Arthashastra should not be regarded as a source for the study of the history of the empire only but also for the history of state formation in the immediately preceding period. The relevance of the Arthashastra for medieval Indian politics is that the coexistence of various smaller rival kingdoms was much more typical for most periods of Indian history than the rather exceptional phase when one great empire completely dominated the political scene."---ibid, p. 63

After that, really, it is hard to find the word republic or democracy in any source on history of India. It does not mean that voting did not exist: see answers provided by others. And the same is true regarding civil liberties. Under the Mughal rule for instance, especially during the reign of Akbar, who had a reputation for being liberal, we find that the various people under his rule had a many freedoms (but again that depends which source you read, that's the crux of politics). One example is the parallel existence of several codes of law, which reflected the normative differences of the population marked by its religious diversity. This said however, are those criteria sufficient to for you to be convinced those were democratic processes? Suppose there is an election system in which women cannot express their vote, can you really talk about representativity and democracy? Again, that depends on what you expect a democracy to look like.

There is a lot of unknown in Indian history. If you ask me, the chance to find a democratic structure among smaller polities such as tribes, is greater, because of direct overview on political processes and peer pressure. But,as with everything, size doesn't matter and small tribes are not necessarily democratic as many democratic studies would show. There are no ethnographic studies before the British intervention in India, so then we're caught in a loop and we are left with only speculations to answer your question.

I'm going to repeat myself, but the most important part, for me, is what one expects to find when looking for "democracy". If the speculation that a small tribe may have engaged representatively with its members during its political processes, then you may be happily concluding that democracies may have existed in India before the British Raj. If however, you are looking at a proper Western-styled democracy with elections and assemblies, you might find it harder to come to this conclusion.