Those who hearken to their Sustainer, and establish regular Prayer; who (conduct) their affairs by mutual Consultation; who spend out of what We bestow on them for Sustenance; (Ash-Shūrā, 42:38)
This āyah highlights the importance of shūrā or the system of mutual consultation for the running of all collective affairs, whether in the family, in a small group or at the highest levels of the Islamic state (not to be confused with a fake entity that is misappropriating that name).
When carried out properly, the system shows that the power of the group is much more than the sum of its members. The group benefits from the best of individual resources, talents and ideas. The process of consultation also brings its members closer together, cementing the group. A hadith promises Allāh’s succor to those practicing shūrā.
Sometimes people mention Islamic Shūrā as another name for democracy. This is a dangerous oversimplification and ignores the gulf of difference between their philosophical underpinnings. Democracy is not a system of mutual consultation, but a system of negotiation between divergent interests. Each constituency on this negotiating table seeks to gain at the expense of others and will do whatever it can get away with—from vote rigging and gerrymandering to manufacturing consent through slick propaganda campaigns. The division of the community into political factions is part of the blueprint of democracy, as is the permanent division between the ruling and opposition groups.
All of these are the exact opposite of the spirit and purpose of shūrā, where everyone is working towards the same goals and seeks the greatest benefit for the entire group.