Yes, Republic is pretty powerful at a very early time. And it never pays off to switch to a different form of government later in the game.
Instead of "tuning down" Republic, a different idea would perhaps be to give Democracy some significant advantage over Republic? But as it is, Democacy has no real benefit over Republic (increased worker speed doesn't really matter that late in the game, and the reduced corruption is not that much - at least it doesn't counter-balance what you lose in the anarchy period...), and therefore it doesn't really make sense to research several optinional techs and go through another anarchy period, just to end up with pretty much the equivalent of what you had before...
In my eyes Republic is not the problem. The problem is rather that Democracy is so under-powered. It should have been moved to a non-optional tech and it should offer some real bonus that makes achieving a Space-, UN- or cultural victory easier. (Because these are usually the victory conditions, where you research that far up the tech tree. For the military VCs you usually stop research pretty early, e.g. after Chivalry or Military Tradition.)
PS: by the way, did anybody notice what I realize just now: the unit upkeep of Democracy doesn't make any sense either! Remember: the war weariness of Democracy is much much higher than that of Republic. So this seems to indicate, that Democracy should rather be meant as a government for peaceful development, right? But the unit upkeep system of Democracy favors huge armies! For small and medium armies, the unit upkeep of Republic is much better, because of the free units. Only with large numbers of units the unit upkeep of Democracy becomes better...
For reference, here is a table of what you have to pay in unit upkeep, assuming an empire of 20 cities (size 7 -12):
[TABLE="Unit Upkeep"]Number of units | 10 | 20 | 30 | 40 | 50 | 60 | 70 | 80 | 90 | 100 | 110 | 120 | 130 | 140 | 150
Upkeep in Republic | 0 | 0 | 0 | 0 | 0 | 0 | 20 | 40 | 60 | 80 | 100 | 120 | 140 | 160 | 180
Upkeep in Democracy | 10 | 20 | 30 | 40 | 50 | 60 | 70 | 80 | 90 | 100 | 110 | 120 | 130 | 140 | 150
[/TABLE]
So the "break even point" comes at 120 units, which is quite a lot for a small empire of 20 cities. With 50 cities the break even point would be even later at 300 units.