What you say is correct to a certain extent, except it ought to also be pointed out that the plurality is not always just or correct in the decisions it makes or in the leaders it chooses. The latter leads to tyranny as well - I believe it happened in Greece with the original tyrants, as well as with the fall of the original Roman Republic. I would actually assert that, by the very nature of what popular rule involves, that such a thing is ultimately inevitable. Such a tyranny, at least in the modern world, would not necessarily be bound by traditional values, as they will have been long thrown out for the sake of "tolerance" on which materialistic secularism seems to depend...
Remember, many "Christain" monarchs would do some pretty unChristain things to advance their power.
This is very true. It also is a difficult problem to avoid. One deterant is that in such a society the Church tends to hold a large amount of power that is not dependant upon that of the monarch. Some leaders of the Church might be corrupt at times, but history shows that there are usually a few good men that are in the place to raise their voices against the injustices of particular leaders. This also happens to be part of the reason I also support fuedalism, which tends to split and limit the effective power of monarchs and other leaders (how's that for controversial?). Of course, an armed populace would appear to be necessary as well. In such a system power would be localized to local nobles who, although they have large amounts of power, also face the retribution of the people over which they rule and risk the voice of the powerful Church turning against them.
A perfect governing system is impossible. It all comes down to looking at which systems best preserve the good and which ones unnecessarily allow for and promote the bad.
A Christian Monarchy should be limited by a Senate, an Assmebly, a Judiciary, and a Church. The Monarch would not reign absolutely or by divine right, but so long as he conforms the course of the State to Justice and Faith. The Constantinopolitan model of the East Roman Empire is far superior in many regards to those given by most western or eastern Monarchies.