The problem is one of scale, at the macro level.

The upside to large countries is that they are economically and militarily stronger, on average. This is leads to a high resistance to outside influence. The downside is large enough (arbitrary) populations encompass multiple ideologies and understandings of the world, which lead to infighting and ultimately destabilization. Note the 3.5% rule, among cultural drift and competing economic incentives.

On the flip side, a small concentrated population is more stable internally, but is fragile to outside influences.

The short answer is the masses are precisely who should rule. The long answer is that they can't if you want the nation to be independent. I posit, there is no optimal balance. There are only different choices that ultimately lead to ruin.