In general, I think you are right - a society where 90% of members are initiates is likely to have theocratic tendencies.
The Orlanth cult, though, is an exception - but unfortunately it doesn't really come across unless you have the complete writeup (the one in River of Cradles is incomplete, and the full version can be found only in an obscure magazine - same old story). The important factor is the Rex sub-cult. Tribal leaders are invested in religious rituals, and have religious responsibilities and spells - but they are not drawn from the priests, but popularly elected and so on. Whats more, they have spells that can be used to keep the priests under control, and enforce their commands. The spell Command Priests means that priests cannot cast Orlanthi magic unless the Chief gives explicit permission, for example.
I'm not sure if I agree with calls to return to lay membership rather than initiateship as the norm, but our ideas about initiate status are certainly pretty unformed at the moment. Though pantheon initiation has been discussed many times, I'm still not sure exactly what it means.
Cheers
David
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