What did Thaksin do?
Thaksin's government changed all this by feeding money directly to people at the grassroots level, which bypassed all the traditional hierarchy and upset the existing balance of power. The result was not only a grassroots constituency that was empowered, but a growing cult of personality that grew up around Thaksin.
This on its own was originally tolerated. Many social activist groups in the country and abroad had long called for this kind direct funding to break the bonds of poverty which had kept rural people poor. Having a strong and stable PM and government during a [redacted] was also thought to be a good thing to maintain political and social stability.
However, Thaksin also embarked on a series of controversial legal moves that ended up openly benefiting his family's companies. Along with this was a concerted campaign to blunt or co-opt all the independent organs of the constitution (the auditor general, the election commission, etc.) and a re-igniting of problems in the south by cutting the army out of its longstanding role there. By the time Thaksin began to pressure media firms not to write negative editorials about his government by getting companies to withhold advertising, he had collected an awesome array of enemies.
There is no doubt that Thaksin had a bold vision for Thailand's future. From Thaksin's perspective he was probably desiring a Malaysian or Singaporean-style democracy with a strong one-party government that also controls the press. Thaksin and his new age political allies were heavily influenced by admiring first hand the level of development in more developed nations. Complete control in change-adverse Thailand was seen to be necessary to push through needed reforms and changes.
Is the People's Alliance for Democracy (PAD) simply a “royalist group?”
The PAD actually started as more of a pressure group formed by powerful business and political interests that were disenfranchised by Thaksin's actions. The royalty angle was used to subtly point out to people how Thaksin's style and aspirations were competing with the royal role in Thai politics—as well as to provocatively push the boundaries of acceptable criticism by drawing royal issues into politics. Another key fear for the PAD was how Thaksin bought other political parties and integrated them into his Thai Rak Thai block to create his majority while manipulating laws to give his company businesses massive advantages.
The PAD is not essentially a royalist group (although it uses these symbols in its protests), but an attempt by powerful interests to push back against what they see as overwhelming Thaksin’s monopolistic control of political and business spheres at their expense.
While it is easy to paint the PAD or UDD with a broad ideological brush, the reality is that there is very little ideology in Thai politics. Voters, particularly in rural areas, are motivated by those who can deliver general prosperity and opportunities for gainful employment.
Has the army chief split with the government by calling for dissolution?
The commander-in-chief’s comments were a way to outwardly show a sense of being open to early dissolution, but they were made in the context of showing the government was stable and dissolution should not happen in the near term. He was only saying that a dissolution should take place in October--after the key military budget and promotions are finished. Dissolution has to be stalled until after that point so that these events can be managed to Thaksin’s disadvantage.
The surprise call for dissolution of the Democrats (a week earlier than scheduled) does throw a monkey wrench into these plans. It is entirely possible that the ruling was expedited in a Quixotic attempt to somehow ameliorate the tense political situation.
Are the Red Shirt protests all about a “people power” uprising?
The protests now, whatever the overall legitimate social and economic aspirations they reflect for the rural poor, are being run on the ground for very prosaic and immediate political goals: to engineer a situation in which Thaksin can return to Thailand and be pardoned. The snipers, the bombs at power stations, Sah Daeng and his shadowy supporters, are all a part of an immediate Machiavellian political game.
The unintended consequence is that Thaksin appears to have created a real rural movement that could be driven by progressive ideas and not controlled by Shinawatra family patronage. How this new power influx will be integrated into Thailand's rapidly changing political system is anyone's guess.
In any case, both Thaksin and his lawyers have several times stated they could end the movement completely if the government gives in to Thaksin’s demands. So at least Thaksin is under the impression that he has the on and off switch for the movement. It is likely that this also drives various Red Shirt faction leaders to steer their own course so that they cannot someday be shut down if Thaksin gets his way.
So we have both a nascent political grassroots block that could have enormous political implications in the future, but on the ground today, a political drama involving traditional political figures jousting for the immediate spoils of the country.