Most Muslims look at the conduct of the Prophet (pbuh) in the city-state of Madina as the most perfect manifestation of a just political order.

According to many Islamic thinkers, the Prophet's (pbuh role and behaviour as the leader of the early Muslim community and head of the first Muslim city-state suggest that primacy in governance should be given to safeguarding social cohesion and social justice, providing internal and external security, allowing all members of the community, Muslims and non-Muslims alike, to conduct their religious duties freely, as well as upholding the good and forbidding the wrong.

The city-state of Madina was founded in 627 AD several years after the Prophet (pbuh) and his earliest companions migrated from Makkah (Mecca). It was established on the basis of a written constitution which formed the essence of the agreement between the Prophet(pbuh) and the different groups living in the city-state.

The constitution is regarded as the first Muslim social contract, outlining the mutual rights and obligations of all members of the ummah, including non-Muslims. It recognised a community, the ummah, not based on ethnicity or tribe, but on religion, but protecting the rights of minorities such as the Jewish tribes that lived in Medina at the time, ensuring that they could freely follow their own scriptural teachings and laws.

The Jews were allowed to have their own judiciary system, which dealt with family law and commercial law, as long as it did not create a conflict with the new community. The ummah is responsible for acting as a whole to reinforce social order and security, and should unite in solidarity against any enemy.

Other political principles have also been derived from the Madinan constitution and the Prophet's (pbuh) Sunnah, such as the accountability of the leader (caliph or khalif) to God and secondly to the community; the obligation of the leader to protect his people while acting justly and dealing equally with all citizens; the fact that the polity was established on the basis of a formal constitution; the rule of Islamic law as a total way of life; and the central importance of social justice and equality.