Regarding democracy, you should be able to teach your kids what the founders thought of democracy, which wasn't much. What we have let slip away is our constitutional republic.
If you truly want your kids to understand history, I would strongly suggest checking out the
Ludwig von Mises Institute . Yes, its focus is on economics, but it's largely economics as applied throughout history as the two are inextricably intertwined. In short, if you don't understand the economics behind historical events, you won't truly understand those events, nor will you truly understand or be able to analyze current events. Case in point: people who don't understand what money is and is not, the business cycle, and how the Federal Reserve operates are going to continue getting robbed by our current monetary system. These are things that cannot be understood without a historical perspective, however.
My wife and I homeschool our two daughters, and when they're old enough this is where I plan to go for much of the history lessons. For basic history, there are some good curricula and books suited for homeschooling that address history from an Austrian School perspective. Aside from
scroogling for these things, you can also go to a homeschooling expo and conference, usually held during the summer months, and check out a wide variety of history curricula.