you're kinda both right. in the specific context of governance, it means what you said with no particular negative connotation. in more general use, it is often

you're kinda both right. in the specific context of governance, it means what you said with no particular negative connotation. in more general use, it is often used to mean a transition to some more degenerate state. you can see this in the more commonly used "devolve". as an aside, it's interesting to note that a similar thing happens with the word "degenerate". usually it means inferior, primitive, etc., but in mathematics it has no such connotation (eg, a degenerate triangle where the vertices are collinear).