Socialist Democracy is a fragment of People's Democracy, a left wing nationalist current which emerged in Belfast in the 1960s and which subsequently affiliated to the USFI. People's Democracy held a seat on Belfast City Coucil in the 1980s during a period when Sinn Féin were boycotting electoral contests. People's Democracy supported the Provisional IRA's campaign.

When Sinn Féin ended their boycott and gained mass support among the nationalist community, People's Democracy withered away. A number of their activists, such as trade union official Anne Speed, joined Sinn Féin.

Socialist Democracy has fewer than ten members and has never contested an election, but it has obtained the recognition of the USFI which had no affiliated or sympathising section in Ireland after the dissolution of People's Democracy.