Is Islam compatible with democracy?
Islamic law is absolutely incompatible with democracy. It is a theocratic system with Allah alone at its head. Allah's law is interpreted by a ruling body of clerics. There is no room for a secular political system in which all people are treated as equals.
Quran (33:36) - "It is not fitting for a Believer, man or woman, when a matter has been decided by Allah and His Messenger to have any option about their decision."
Quran (18:26) - "Allah... makes none to share in His Decision and His Rule"
Quran (45:21) - "What! Do those who seek after evil ways think that We shall hold them equal with those who believe and do righteous deeds,- that equal will be their life and their death? Ill is the judgment that they make." Unbelievers are not equal to Muslims. This is dutifully reflected in Islamic law.
Quran (5:44) - "Whosoever does not judge by what Allah has revealed is among the disbelievers" This is one reason why terrorists openly fight for an Islamic state against democracy and secularism.
Quran (39:9) - "Are those who know equal to those who know not?"
Quran (4:141) - "...And never will Allah grant to the unbelievers a way (to triumphs) over the believers." This is at odds with democracy, which allows anyone to serve in a position of power over others regardless of religious belief.
Quran (63:8) - "...might (power) belongeth to Allah and to His messenger and to the believers;" ie. not to anyone else.
Quran (5:49) - "So judge between them by that which Allah hath revealed, and follow not their desires, but beware of them lest they seduce thee from some part of that which Allah hath revealed unto thee" Allah's Qur'an takes priority over the desires of the people. A democratic nation is by nature one that is not governed by Islamic law, meaning that a Muslim citizen would have divided loyalty. It's clear from this verse which side he must choose.
Quran (12:40) - "...Allah hath sent down no authority: the command is for none but Allah..." Sometimes translated as "None have the right to legislate except Allah."
Quran (4:123) - "Not your desires, nor those of the People of the Book (can prevail): whoever works evil, will be requited accordingly. Nor will he find, besides Allah, any protector or helper."
Quran (4:59) - "O you who believe! Obey Allah and obey the Messenger and those in authority from among you..." Obedience is strictly limited to a government drawn from believers, not from the broader community. This verse has also been used to justify submission to autocratic rule, however oppressive it may by. As an Arab tradition put is: "tyranny is better than anarchy."
Quran (9:3) - "...Allah and his messenger are free from obligation to the unbelievers..." Muhammad used this "revelation" to dissolve a standing treaty and chase non-Muslims from their homes if they wouldn't accept Islam. This practice would be incompatible with democratic rule, in which everyone is considered equal.
Muslim (19:4294) - "When you meet your enemies who are polytheists [Christians...], invite them to three courses of action. If they respond to any one of these, you also accept it and withhold yourself from doing them any harm. Invite them to (accept) Islam; if they respond to you, accept it from them and desist from fighting against them ... If they refuse to accept Islam, demand from them the Jizya. If they agree to pay, accept it from them and hold off your hands. If they refuse to pay the tax, seek Allah's help and fight them" Non-Muslims are intended to be subordinate to Muslims.
Bukhari (88:219) - "Never will succeed such a nation as makes a woman their ruler."
Bukhari (89:251) - Allah's Apostle said, "Whoever obeys me, obeys Allah, and whoever disobeys me, disobeys Allah, and whoever obeys the ruler I appoint, obeys me, and whoever disobeys him, disobeys me." The ruler referred to here is the Caliph, who is appointed by Allah, not by popular election. Democratic rule has no legitimacy against the will of the Caliph who, as we see by chain of reference, has the authority of Allah.
At-Tirmidhi 169) - There is no obedience to anyone who is in disobedience to Allah