By "true" democracy, I assume you mean something like the old Athenian system, minus the slavery and non-universal suffrage?
It might work if the country is:
1) Kind of small, direct democracy requires alot of "physical presence" requirements. Unless you develop better and more trustworthy online systems than we have now *and* make them widely availble. But that's easier in a small country anyway.
2) A religious and ethnic monoculture. The biggest danger with direct democracy is the tyranny of the majority. If a minority is easily culturally or religiously identifiable, it won't work, because the majority will, in all likelyhood, turn them into second class citizens and then the minority will begin to revolt.
3) Responsibility for wrongdoing is clear despite a diffuse power structure. In current modern representative democracies, its clear (if the system is set up well) who is in authority and who is responsible for decisions, and who is to blame. In a direct democracy, this is not the case. What if, to pick a random example, your direct democracy is swept away by nationalism and a charismatic leader to engage in a disastrous and ill advised invasion. (The Athenians did this, it's what brought an end to Athens as a independent power)
4) The problem of expertise. There are a number of things any modern nation does that are, in a word, incredibly complicated, but that your average layman, even a well educated layman, knows very little about. The average layman has little idea as to the worthyness of a public works project's viability, or the worth of a theoretical space program, or whether a particular research program for a cure for disease X is worth it, and so on. This is not to say that people are ignorant and stupid (although they can be frighteningly so), but rather that some things require sufficiently specialized knowledge that the general public has no means to understand or judge them. What then?