This is how most of the First World is run.

Kinda but not really. The mandarins / professional bureaucracy aren't a technocracy to start with and the voters aren't quite that powerless. But that's a fairly big discussion, probably for another thread.

if something can scale for cities with millions of inhabitants, why not small countries?

A large subset of political ideas/solutions/proposals suffer precisely from the problem that they scale badly. For example, democracy.

the case can be made it is a democracy in the same sense say Sweden is a monarchy.

Which is not an interesting or meaningful sense at all.