Islam is compatible with democratic principles. The religion itself is a democracy.
The Truth:
A democracy is a system in which all people are judged as equals before the law, regardless of race, religion or gender. The vote of every individual counts as much as the vote of any other. The collective will of the people then determines the rules of society.
Under Islamic law, only Muslim males enjoy full rights. The standing of a woman is often half that of a man's - sometimes even less. Non-Muslims have no standing with a Muslim.
The Islamic state is guided by Islamic law, derived from the Qur'an and Sunnah. A body of clerics interprets the law and applies it to all circumstances social, cultural and political. The people are never to be placed above the Qur'an and Sunnah any more than man should be above Allah.
It is somewhat debatable as to whether there are any states in the Muslim world that qualify as actual democracies. There is no denying, however, that the tiny handful that are often held up as democratic nations are ones in which deep tension exists between the government and religious leaders, as the later often complain that it is an idolatrous system imposed on them.
