Misconception: Democracy is not compatible with islam

Background: It is commonly thought, even amongst Muslims, that the system of democracy or democratic principles are not compatible with The Quran or islam.

The Quran has examples of leaders with authority (e.g. Solomon, Joseph), however this would be conducted by group consultation and representation:

Those who listen to what is said, then follow the best of it; those are the ones God has guided, and are the men of understanding. [39:18]

...and consult with them upon the conduct of affairs... [3:159]

O you who believe! when it is said to you, Make room in (your) assemblies, then make ample room, God will give you ample, and when it is said: Rise up, then rise up. God will exalt those of you who believe, and those who are given knowledge, in high degrees; and God is Aware of what you do. [58:11]

And those who have responded to their Lord, and they establish the bond, and their affairs are conducted by mutual consultation among themselves, and from Our provisions to them they give. [42:38]

God has taken the covenant of the Children of Israel and raised from them twelve representatives, and God said: "I am with you if you uphold the bond and contribute towards betterment... [5:12]

Elected leaders would have to lead by example:

Do you order the people to do goodness, but forget yourselves, while you are reciting the book? Do you not reason? [2:44]

O you who believe, why do you say what you do not do? [61:2]

O mankind, We created you from a male and female, and We made you into nations and tribes, that you may know one another. Surely, the most honorable among you in the sight of God is the most righteous. God is Knowledgeable, Expert. [49:13]

Corruption prohibited:

Do not devour the wealth and property of one another in a wrongful manner, nor bribe the officials/judges so that you may consume a part of the other people's belongings sinfully while you know! [2:188]

Such a system would have to promote the following social order for the benefit of everyone:

...you are the best suited community that has been raised up for the good of mankind. You shall enjoin the Right and discourage the Wrong... [3:110]

...help one another in furthering virtue and God-consciousness, and do not help one another in furthering evil and enmity; and remain conscious of God: for, behold, God's punishment is severe. [5:2]

O believers! Stand out firmly for justice, as witnesses for the sake of God, even (if this may go) against yourselves, or your parents, or your kin... [4:135]

O believers! Stand out firmly for God, as witnesses for the sake of justice, and let not the enmity of a people cause you to turn away from justice. Do justice, for that is akin to piety...[5:8]

Invite to the way of your Lord with wisdom and good instruction, and argue with them in a way that is best. [16:125]

Not equal are the good and the bad response. You shall resort to the one which is better. Thus, the one who used to be your enemy may become your best friend. [41:34]

To each is a direction that he will take, so you shall race towards good deeds. Wherever you may be, God will bring you all together. God is capable of all things. [2:148]

Take to pardoning, and order with what is good, and leave alone the ignorant ones. [7:199]

Let there be no compulsion in religion: Truth stands out clear from Error: whoever rejects evil and believes in God has grasped the most sure hand-hold, that never breaks. And God is Hearing, Knowing. [2:256]

And lastly, people in a community are reminded that they should 'be the change they wish to see in the world':

...God is not to change the condition of a people until they change what is within themselves... [13:11]

READ - click to look up verse references