HOAs can be a great thing, but they can also digress into an ugly beast. Homeowners should never be apathetic about the HOA. Going to meetings and participating in HOA elections can be very important on those occasions where the association has to make tough decisions.
Sometimes homeowners will react in a knee-jerk fashion and call for a strict revision to rules that might be an overreaction that could lead to unnecessary turmoil. Homeowners that do not participate in the process can be left behind unwittingly.
Sometimes an elected HOA president might develop tendencies to overreach his or her authority. Homeowners are wise to vote out these unreasonable people. If things get really out of control there is legal action than can be brought against the HOA and if the problem centers around an individual, that person could find themselves in a great deal of legal trouble if they are found to have abused their power. The HOA is for the benefit of the community and each property owner should have an equal vote in any processes that HOA oversees.
Generally an HOA will be setup with a super-majority requirement for major rules changes such as banning rental properties or something severe like that. It all depends on the HOA's written bylaws. I have seen some require 75% approval and yet others with a simple majority.
When buying a home in a neighborhood with an HOA, always read through the HOA rules, guidelines, and bylaws to make sure you are comfortable with how things are controlled and how rules and regulations are both enforced and changed.
When living in a single family detached neighborhood, the HOA should have modest regulatory authority. Of course condos have to be more strict since the individual owners of the units own only the space between the walls. The land and building structures are cooperatively owned by every one in the community.
I run into buyers that will not buy a home in an HOA and I feel that is a bit of an overreaction. A well written set of bylaws with limited control for the HOA can lead to higher property values and less of a decline in neighborhood conditions over time. Buyers just need to make the effort to read through the documents and maybe even have an attorney skim through if something looks out of sorts.
HOA's are great... until they're not ;) Due diligence is always the best course of action.