The phrase “Islamic State” is a new concept created in the twentieth century by some modern Islamic thinkers. With the advent of the nation-state, these Muslim thinkers, highly influenced by the European separatist movements of the nineteenth and early twentieth centuries, conceptualized an “Islamic” version of the nation-state, powered by an “Islamic” ideology in which the political leaders advocate for a central role for Islam in governance and rule. In some Muslim countries, these ideologues formed “Islamic” political parties that adopted “Islamic” positions and solutions to various problems as a platform. Though these Islamic political parties participated in some instances in the democratic political process of their respective countries, their overall outlook of governance is closer to a theocracy, where the political leaders also function as religious leaders. This is in stark contrast to the early caliphates of Islam where political leaders left religious proclamations and determination of doctrine to the scholarly class, although these scholars often functioned as court judges and advisors to the ruling elite.
In any case, the concept of “Islamic State” or “Caliphate” as envisioned by terrorist groups such as ISIS and the Taliban has virtually nothing in common with the political structure of the early caliphates, as they ignore authentic Muslim scholarship and even anathematize many of its scholars and mark them for assassination. (Though not widely reported by the press, this happened routinely under ISIS leadership in Iraq.)
Conversely, there are several Muslim-majority countries today that claim Islamic teachings or Sharia as the basis of their constitutions or laws. What this means in practice is usually more ceremonial than practical, as these same countries often have Western legal systems in most aspects of their national and state laws, except in family matters related to marriage, divorce, and child custody. These family laws apply only to Muslim citizens, whereas non-Muslim citizens would be subject to their own religion’s laws, if any, or the civil code. Additionally, many of these countries that claim to be Islamic states have a governing system which is not aligned with Islamic principles and are often oppressive both to their citizens and to other nations.