Prophet Muhammad died in 632. The day after his death, three of his associates (Sahabah) met at Madinah in response to the meetings of other groups in the city, and at the end of their deliberations, one of the Makkan migrants (Muhajirun) was chosen as the first khalifah.
Khalifah (Arabic) or Caliph (English) contains various ideas, but the most important historical fact about the word "khalifah" is that it was not a commonplace political term for people in Arabia at that time. In fact, it may have been unprecedented. We must recognize that khalifah was a choice of vocabulary not familiar to people of that time-it was not shaykh, or malik nor imperator, all familiar terms for authority figures at the time.
The fact that it was a new word, denotes that the situation created after the death of Muhammad was a new situation that needed a new concept of leadership. When Muhammad died, the new political situation emerged because:
• Everyone who followed Muhammad at that time accepted the idea that he was a messenger of God
• They also accepted that he was the last Rasul Allah (the last)-(Rasul Allah was a transmitter of books - someone who was under the influence of WAHY, transmitting God's word directly to humankind, which meant that at any time what Muhammad said might be revelation, and hence normative, prescriptive, law.
• It was understood that no one else could succeed him in that capacity; no one after him would be able to make that claim. The Qur'an stated that clearly.
In Arabic, the term khalifah means in a mundane sense "one who comes after," even as in the people who inhabited a campground after another group.
The political institution of the khilafah (institutional form of khalifah) that emerged was thus a successor to Muhammad, but not to wahy (meaning the state of receiving revelation from God). The concept of khilafah was an empty vessel that became filled over time. The rights and duties of the khalifah evolved over time. The minimum definition that evolved was (although others developed more elaborate views):
1. the khalifah was the protector of the Muslim community; as its protector, he can command armed forces and distribute the revenues that came to the state. He is the head of state but not the head of a religion in the sense that he cannot define what the religion is, and will never receive a revelation
2. the khalifah does not have the power to legislate or innovate in the law.
An important distinction to remember is that Islam did not begin as a political entity, but rather, a political entity began within Islam, or more properly, Muslim history. Islam is not the khilafah, nor is the caliphate synonymous with Islam.