HONOLULU (AP) _ Democrats swept to landslide victories in special elections to fill three city council seats that were vacated when voters recalled three councilmen who had switched from the Democratic to the Republican party.

Former state Reps. Donna Mercado Kim and Arnold Morgado Jr. and state Deputy Attorney General Randall Y. Iwase outpolled their opponents by margins of more than 2-to-1 in Saturday's voting.

The results restore the Democrats' 7-2 majority on city council, where the GOP had gained a 5-4 majority with the switch in June.

The special election was set up by a vote on Oct. 5, in which a majority voted to recall George Akahane, Toraki Matsumoto and Rudy Pacarro, who surprised their predominantly Democratic constituents by joining the Republican Party.

Before the recall election, President Reagan supported the three councilmen in television ads, while Democratic U.S. Sen. Daniel Inouye and Gov. George R. Ariyoshi encouraged the ouster.

Morgado had 6,640 votes in the 8th District; his nearest opponent, Republican Ron Kimura, had 2,526 votes.

Kim in the 7th District had 5,450 votes, with Jean Pacarro, Rudy Pacarro's wife, running second with 2,447 votes.

Iwase won in the 1st District with 4,120 votes, followed by Democrat Don Buenconsejo with 1,287.

Only 38.6 percent of the 79,652 registered voters in the three districts cast their ballots.

Republican County Chairman Howard Chong indicated that the party will drop its legal challenge to the election. The courts had barred Matsumoto and Pacarro from the ballot, and the GOP is appealing that decision to the U.S. Supreme Court.

''The general feeling is 'Let this baby go to bed, and take on the race in '86','' Chong said.

Inouye said the results show the Democratic party is ''alive and kicking.''

Republican state Chairwoman Patricia Saiki called the loss ''a little bit of a setback,'' but said it was not ''a true predictor of what's to come'' in 1986.

The new council members are to be inaugurated Jan. 17.

The special election had been scheduled for Nov. 30, but was postponed until Dec. 28 to give the Republicans time to pick replacement candidates after the state Supreme Court ruled Matsumoto and Pacarro could not run.

Akahane did not try to get on the ballot.