The concept of `protective democracy` focuses on the idea that citizen participation is crucial in democracies. Option 1 correctly states this, highlighting that this concept propounds that citizen participation is essential. This means that citizens should actively participate in decision-making processes to protect their rights and maintain a functioning democracy.

Option 2 also accurately reflects the concept of `protective democracy.` It states that citizens must be able to protect themselves from governmental encroachments. This means that citizens should have mechanisms or safeguards in place to prevent the government from overstepping its boundaries and violating their rights.

Option 3 is the correct answer to the question as it states that `protective democracy` is compatible with laissez-faire capitalism. However, this statement is incorrect. `Protective democracy` is generally seen as opposed to laissez-faire capitalism, as it emphasizes the need for government intervention and regulation to ensure fairness and protect individual rights.

Option 4 correctly states that political equality, understood as equal voting rights, is an essential aspect of `protective democracy.` This means that all citizens should have equal opportunities and rights to participate in the political process, including the right to vote.

In conclusion, options 1, 2, and 4 are correct in describing the concept of