I get the sense that to the extent that a theocracy can be reasonable (worth of acceptance, therefore) it is also unobstrusive and has no need to actually pursue explicit recognition.
As in so much else, proselitist monotheism is both more likely to seek such a situation and more likely to corrupt it. Pretty much all of the alternatives to it are shielded against those dangers for some reason or another.
I think one-true-wayism more broadly seems to be the issue rather than (ir)religion in of itself. While one-true-wayism is historically (and contemporarily) more common in monotheistic traditions, I've seen it in other places. The zealot atheists who speak of eradicating or outlawing what they call "religion" for example, are unsettling one-true-wayists. So are the Pagans whose focus on tribalism, ethnicity, or ancestry descends into subtle or outright racism. They're fringe, but they're a vocal fringe - reminders that one-true-wayism can be found in just about any group.
Most of the time, these fringe groups don't get much political power. If they didn't get much power - whether in a theocracy or otherwise - it seems things would be largely okay. If, on the other hand, we have situations like we're getting in the United States where a relatively fringe branch of Christianity starts amassing too much political power, we end up with challenges to basic human rights on the grounds of their religious ideology. And that's a scary place to be. That this is a real threat in the United States may be why so many of us are soured to the very word "theocracy." The only sort of theocracy we might see in the United States would be the ultra-conservative one that would strip rights away from many a citizen.