Hungary is a small country. There are 10 million people here, and for five hundred years they've been subjects of one or another foreign king - until the 90's (I count the USSR as a foreign king for the purposes of this post).
In short, they're a country governed by rank amateurs.
Orbán in particular is an odd duck, as well as the Fidesz party. They're a student protest movement who abruptly found themselves in control of a whole sovereign nation. As such, they have a lot of ideas about how to fix things - most of which are harebrained.
In the last election, Fidesz obtained a supermajority of Parliament, meaning that whatever Orbán says, becomes law. And here's the thing: Orbán says a lot. And Fidesz says, "Hyuck, hyuck, sure, let's write it down and pass it!"
Then the other 10 million Hungarians try to figure out how to pay for it, what kind of procedure might be involved, how to make decisions fairly - all in the sure and certain knowledge that those clowns in Fidesz are going to change it all next month anyway.
It's easy to look at something like this surveillance law and think "OMG! Hungary will be 1984!" - but no. First, nobody even knows who would be in charge of the surveillance. Who will pay for the program. What procedure will be followed. It'll be yet another clusterfuck of massive proportions.
Case in point from two months ago: Fidesz suddenly decided that tobacco sales would require a permit, and that there would be a fixed number of permits, effective immediately. Since the corner tobacconist is a staple of the retail distribution system here, this immediately put a large number of long-term family businesses at risk.
So they sued. It came out that Spar automatically got permits - and Orbán openly said, "Sure, I've got financial interests in Spar, so it's natural we'll trust them." But Fidesz swore that other than that political considerations would not determine who got permits.
Until somebody got recordings of some local Fidesz mayor determining who would be given permits, based on their Fidesz loyalty, and people sued to see the procedure. No, Fidesz said, that's confidential. Well, but procedure can't be confidential by law. So Fidesz wrote a new law retroactively declaring confidentiality for that class of procedure.
They still have to win an election in 2014, and right now people would be perfectly happy to stew them up and eat them whole. The only stick they've got is maintaining that if people don't vote Fidesz that Jobbik will win - and we all know what fascists they are! That, or the Socialists will win - and we all know how corrupt they were!
Point being, people see through this shit and mostly just get on with their lives, because it's all Keystone Kops anyway. Short of closing the borders, Orbán can't actually impose a dictatorship, and if he actually tried to do it, what real force would he have? The military isn't going to back him up. He's already pissed off the police by calling their union clowns (remember the cops dressing as clowns in protest a couple of years ago? No? Maybe because that doesn't fit with the budding-fascism story line?)
In short, it's chaos. Interesting times indeed! But it's not the Third Reich, and it's not going to be. Racism is a real problem, that's true. The only thing that would fix that would be economic prosperity - and honestly, Orbán has been doing pretty well resisting Union demands for austerity, so I'll give him that much.
Discount the gloom-and-doom. It's just more theater.