The chief good of system of government is that it prevents corruption. Men are male mammals and not angels. If men were angels then we wouldn't need government. We men are power-hungry, egotistical creatures. We need checks and balances. Each man needs a woman to balance him out (family level of governance). Each community needs a council of elders (bet din). Thus, the goal for communal governance, at least at the local level, is to allow each citizen of the community a voice as a rights-holder.
By contrast, a cult is the religious analog to a totalitarian regime in which the centralized authority is the sole rights-holder. History has shown that totalitarian systems seek to control all aspects of public and private life. Free thought is forbidden. There is no "freedom of conscience." The government is your conscience.
Now, of course, cultism like totalitarian forms of government takes many forms. For example, you might have a government that is largely good except for a few totalitarian tendencies. A local religious congregation might have the structure of a cult--one man in the sole position of authority--and yet in practice have an egalitarian community because that man in authority has arbitrarily decided to listen to his subjects and so give them a voice. But how quickly that can change if the benevolent dictator is replaced with someone who is not so benevolent!
How do we prevent cultism? We establish battei din (councils of elders) in each community. But don't take my word for it:
"23 Paul and Barnabas appointed elders for them in each congregation and, with prayer and fasting, committed them to the Lord, in whom they had put their trust," (Acts 14:23).
"5 The reason I left you in Crete was that you might put in order what was left unfinished and appoint elders in every town, as I directed you," (Titus 1:5)