Given that there is no institutionalized clergy in Islam, how does the religious system work? What is the nature of religious leadership in Islam? What is the role of the state in religious matters?

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This is a very interesting question! Islam is a fascinating religion to study and has some distinct differences from other major world religions when it comes to leadership and the role of the state.

A quote from the Women's Islamic Initiative in Spirituality & Equality helps us understand how the religious system works:

According to the Qur'an and Sunnah, religious leadership in Islam should be understood as a system based on merit, whereby leadership positions are determined according to each candidate's mastery of religious knowledge and acceptance by his or her community to lead as a moral example. The purpose of this system is to ensure that the most competent person is selected to lead the community and to educate those seeking knowledge, regardless of their gender.

Instead of an institutionalized clergy, in Islam the most...

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