"small" indeed - if it was just that ;-)

Ok, what Obi-Wan, in his idealistic way, ment was that the current system, as bad as it is/was, turned into an oppression, and with Palpatine having supreme powers, no one could stop his will, so it would be a dictatorship!

Though the Jedi swear alliegance to their Order, they are the guardians (not soldiers, more like a policeforce) of the galaxy (wanted or not!)

And in contrast to conflicts against the Sith in the past, now a Sith was sitting in the middle of the Republic, not on the head of an outside Empire, to threaten peace ... yes, voted there, but not all choices are good, are they?

Anakin already took his choice, telling Padme in Episode2, that he would rather have a "strong leader" (aka dictator), than the squabbling senate (of a thousand worlds) - so he kind of said "good bye" to democracy then.

Maybe if Lucas wrote "My allegiance is to the Republic, the Order, to Freedom!", it would sound more convincing?