First of all, we would like to highlight the fact that pluralism is something that has been known to Islam and Muslim scholars for a long time. Islam does not say that only one party should run the affairs of the whole state or seize power; rather, it leaves the matter to be determined according to the rules of as-siyasah ash-shar`iyyah (Shari`ah-oriented policy), which vary according to time and place. Muslim scholars accept the articles of the democratic system that coincide with the teachings of Islam.
Sheikh Ahmad Kutty, a senior lecturer and Islamic scholar at the Islamic Institute of Toronto, Ontario, Canada states: “Generally, Muslims can decide and run the affairs of their country through consultation and consensus among the people, but if, while exercising this authority, they were to legislate on matters on which Allah and His Messenger have pronounced decisive judgments, then that is not acceptable in Islam. Examples are legislation to legalize homosexuality, fornication, adultery, aggressive wars, discrimination based on race or ethnicity or language, liquor and intoxicants, and so on. People have no authority to legislate on or tamper with matters about which Allah has pronounced a decisive judgment.
People, however, are permitted to make decisions on all matters that do not fall under the purview of the divine writ through mutual consultation and consensus among themselves. This area of legislation in Islam is immense and extensive; whereas, the first category where people have no freedom to exercise legislative authority is rather limited.
The vast area of legislation affecting public life and social relations is, therefore, subject to democratic practice so long as laws are governed by the Qur’anic imperatives to establish truth, justice, fairness, and compassion, as much as humanly possible. People are not only permitted to achieve this through the democratic process of consultation and consensus; rather, they are ordered to do so according to the clear orders of Allah in the Qur’an:
“And consult them in their affairs; then when you decide (matters based on consultation) put your trust in Allah (in implementing the same) for verily Allah loves those who place their trust in Him” (Al `Imran: 159).
“And their affairs are run through mutual consultation” (Ash-Shura: 38).
The Prophet (peace and blessings be upon him) further warned rulers and leaders who betray the trust invested in them by people, of terrible divine retribution.
Finally, the Qur’anic order for humanity is to establish justice, compassion and to strive against injustice, evil and aggression:
“Verily, Allah commands justice and compassion, and giving freely to the kith and kin, and He forbids lewdness, evil of all kinds and aggression; He admonishes you in order for you to remain conscientious” (An-Nahl: 90).
“O you who believe, be steadfast witnesses for Allah in equity; and let not hatred of any people make you swerve from justice. Deal justly; that is nearer to God-fearing. Fear Allah. Allah is aware of what you do” (Al-Ma’idah: 8).
To conclude: If anyone thinks Islam sanctions monarchy, dictatorship and despotic rule, and is opposed to democracy as stated above, they are simply contradicting the teachings of the Qur’an both in letter and spirit.”