They founded the Democrat-Republican party, which favored a weaker federal government, as opposed to the Federalist party of George Washington and John Adams which favored a stronger federal government.
However, no inference should be made from the party's name. It was not a combination of anything resembling the modern Democratic and Republican parties, nor does it "prove" that we have a uniparty system in the U.S. The disputes back then were completely different from the ones today.