Islamic democracy refers to a political ideology that seeks to apply Islamic principles to public policy within a democratic framework. Islamic political theory specifies three basic features of an Islamic democracy: leaders must be elected by the people, subject to sharia and committed to practicing “shura”, a special form of consultation practiced by Muhammad, which one can find in various hadiths, with their community.Countries which fulfill the three basic features include Pakistan, Iran and Malaysia amongst others. Saudi Arabia and the UAE are examples of countries that do not adhere to the principles of Islamic democracy despite being Islamic countries, as these countries do not hold elections. The expression of Islamic democracy is different in the Muslim majority countries, as sharia interpretations vary from country to country, and the use of sharia is more comprehensive in countries in which sharia forms the basis for state laws.

The concepts of liberalism and democratic participation were already present in the medieval Islamic world. The Rashidun Caliphate is perceived by its proponents as an early example of a democratic state and it is claimed that the development of democracy in the Islamic world eventually came to a halt following to the Sunni–Shia split.