Explain how regulating the competition for power is an essential purpose of a democracy.

The initial purpose of democracy is indeed to give most power to the citizens so we have the freedom to do whatever we want. 

But, if competition for power left unregulated, people with large influences, wealth resources could basically do whatever they want in order to win the competition for power. For example companies who sell products with cheap and dangeorus materials to obtain more profit or Government officials who bribes voters with money in order to got elected.

Because of this ugly side of human nature, some sort of Government regulations/intervention is necessary in order to achieve true democracy

Very useful. it is to learn because history repeats itself so learning about it those mistakes not happen again.