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It's actually the first time I've heard of that rule. Not that I'm particularly interested in history and politics, but I'm pretty sure it hasn't been some major point made at school.

Seems a bit unjust to redefine democracy for the sake of something like that though, the Greeks coined that word for their system and it wouldn't be considered a democracy today :/
Still, as far as a skimmed entry in wikipedia goes, war between democracies is certainly not impossible.