This thesis examines the relationship between democracy and domestic terrorism, relying on a within-case study of the democratization process of Greece in the 1970s. The central theoretical argument, which is claimed by Chenoweth (2007) is that terrorism occurs so often in democracies because of a competitive logic that drives interest groups to compete with one another using violence. This thesis attempted to strengthen this so-called 'theory of the competitive logic' by further specifying the exact causal mechanism by means of a case study. Overall, the analysis disconfirms and thereby challenges the hypothesized causal mechanisms. A main finding is that Greece's democratization process did result in outburst of domestic terrorist activity, but did not result in an outburst of social mobilization in general. The large corrupt and clientelist overbearing Greek state, combined with the omnipresence of a few strong political parties immediately halted the ‘political energies’ that naturally arose after the fall of the Greek junta. Based on this finding, this thesis claims that, at least in the Greek case, not democracy's commitment to pluralism, but rather a lack of pluralism led to the proliferation of domestic terrorism. Further qualitative research should be done to assess whether Greece is an exceptional case or whether the theory is supported in other cases that experienced democratic transitions in the 1970s, such as Portugal and Spain.