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Those really interested in this subject might want to check out Wiseacre's U.S. Presidential Elections thread on this forum. He's written most of the posts there but I've also contributed substantially.
The Democratic-Republican Party, unlike the Federalists, the Whigs, and various minor parties, did not dissolve, ever, not once. In the time of Andrew Jackson, the party was renamed the Democratic Party, which name it still bears. (So of course the OP could not be more wrong; it's the Democrats, not the Republicans, that trace back to the D-Rs.) You could sort of call it a liberal party back then, but from Jackson down to Lincoln it would be more accurate to call it an "agrarian" party -- for preserving the agrarian nature of the U.S. economy and pursuing Thomas Jefferson's vision, against industrialization and all of the government activities that went along with that.
The Federalists, Whigs, and Republicans (by which I mean the one that bears that name today -- founded in the 1850s, first president was Abraham Lincoln, etc.) were all industrial parties, advocating strong central government for the purpose of encouraging the development of industry. Beginning in the 1840s-1850s, the issue of slavery also arose and anti-slavery parties (minor ones like the Free Soil Party) to advocate abolition. The Republicans were the first to combine industrialism with abolitionism.
The Civil War resolved the agrarian-industrial issue. The Democrats thereafter were confined to a challenger role for the most part until under Woodrow Wilson they adopted the reformer, progressive, or industrial-liberal role that was first championed by Republican Theodore Roosevelt. Under Franklin Roosevelt the Democrats made a huge comeback and were never again as weak as between the Civil War and the Great Depression.
As for big versus small government, both parties are big government now, the only difference lies in what exactly they want the government to do.
I agree with everything in Dragon's post, except at the end whe he says both parties are for big gov't. The GOP definitely wants smaller gov't, less gov't spending, and less gov't intervention than the Dems do. Bush43 not withstanding, that was then and this is now.
Since Nixon, Republicans have campaigned on smaller government and never delivered
We should trust them now?