How James Madison's bones must have moaned the other night when President Reagan invoked the Founding Father's name {"Reagan Assails 'Washington Colony'," Dec. 14}. The president alluded to Federalist Paper No. 10 and warned his appointees of the insidious rise of factions, namely Congress, the media and special interest groups (whomever they may be). To comprehend the irony of Mr. Reagan's assertion, we must first review Mr. Madison's own thoughts.

A faction is a group of citizens (minority or majority, although the majority is what worried Madison) who "are united by some impulse or passion, or interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community."

Now, our very nature insists upon the rise of factions. All humans are unequal in "their possessions, their opinions and their passions"; they accumulate wealth of different types and amounts. And given the opportunity, citizens do not act according to moral or religious motivation, but to advance their own selfish interests. Human nature is faultly and unperfectable, and this must be realized and accepted. Restoring Eden is impossible.

So instead of expecting Americans to act as angels, Mr. Madison allowed them to act as humans. And he established a government whose very structure would encourage the growth of factions. "Extend the sphere, and you take in a great variety of parties and interests. You make it less probable that a majority of the whole will have a common motive to invade the rights of other citizens." In fact, only the common good could generate a majority. This does not eliminate mistakes, of course, but it restricts the potential for "oppression," the ultimate goal of democracy.

By decrying the rise of factionalism, Mr. Reagan hews at the philosophical pillar of our democracy and demonstrates a lamentable ignorance of the principles of the Constitution as well as a peevishness that he cannot enforce his own personal will -- a perfect proof of Mr. Madison's theories of human nature.

GARRETT LOWE Washington