Kashmir has been a disputed territory if one goes by the words of political leaders from Pakistan. In contrast, they claim that the part of Kashmir which they claim as to be Azad Kashmir is actually an oppressed territory which India sees as Pakistan Occupied Kashmir.
If we talk about democracy in both regions of Kashmir, it can be easily said that Indian Kashmir has more freedom of expression with mainstream political parties of India having their significant presence in the state.
On the other hand, in Pakistan-held Kashmir, a government does exist with even the so-called Prime minister being in place. However, the reality is that the government has no recognition, even in Pakistan, leave alone the world community. If Azad Kashmir was, in reality, an independent entity, the same would have embassies across the world. No world nation recognizes the presence of Azad Kashmir. It is, in fact, illegal occupation of Indian Territory by Pakistan. Democracy exists only on paper in so-called Azad Kashmir with Pakistan Army wielding a significant influence on the politics of the region. Every opportunity to raise democratic voice is ruthlessly crushed in Azad Kashmir. It is a doomed land and will only be free when India gets it back from Pakistan.