First in MoO2 the Alkari surrenders to the Psilon just as I am about to attack the Alkari home planet making the Psilons way too strong and only empire I can reach with my ships. To be able to take out a Psilon planet, I need a much stronger fleet but I am incapable of supporting more ships (50% tax and just about out of money and already built star bases at all my planets). I might try to think of a way out later but now it feels hopeless.
Changing to MoO 1 for a change of pace I get cornered hard (remember the AIs cheat a lot and are capable of colonising much faster in the very beginning) and have problems getting tech needed to do a successful invasion of a neighbour when I get my planets decimated by a couple of lovely random events followed by a Galaxy Council vote where someone else gets voted ruler. Not having enough technology nor production to defend against the incoming death fleets in the final war, I surrender.
It is rare to lose against the computer in MoO2 for me unless I specifically build a weak race so maybe I can turn it around somehow if I think for a bit. It is also rare for me to go for democracy but it should not be that weak a pick, or is it. It certainly is the last choice for government pick.