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From Monarchy to Theocracy: The Story of Modern Iran
The Business Guardian
|June 23, 2025
Iran's shift from monarchy to theocracy in 1979 reshaped its politics, society, and global role. Supreme Leaders and presidents have alternated between repression and reform, leaving Iran torn between authoritarian control and public demand for change.

The modern history of Iran's governance is shaped by a dramatic shift from monarchy to theocratic rule, catalyzed by the 1979 Islamic Revolution. Prior to that, Iran was under the rule of Mohammad Reza Shah Pahlavi, whose Westernization and secular policies created economic disparities and societal unrest. Despite fostering industrial growth and modern infrastructure, the Shah's autocratic rule, suppression of dissent, and close alliance with the US alienated large sections of the population, particularly the clergy.
The Islamic Revolution of 1979, led by Ayatollah Ruhollah Khomeini, marked a turning point. The monarchy was overthrown, and Iran was declared an Islamic Republic. This new regime introduced the concept of Velayat-e Faqih (Guardianship of the Islamic Jurist), making the Supreme Leader the most powerful figure in the country, above elected officials.
AYATOLLAH KHOMEINI (1979-1989): FOUNDING A THEOCRACY
Ayatollah Ruhollah Khomeini, Iran's first Supreme Leader, radically transformed the nation's political structure. His vision was to create a state governed by Islamic principles, rejecting both Western capitalism and Eastern communism.
The 1979 Constitution institutionalized clerical oversight of governance, particularly through the Supreme Leader, Guardian Council, and Assembly of Experts.
Under Khomeini, Iran experienced significant changes: Political: The Shah's centralized monarchy was replaced with a hybrid system of elected bodies (president, parliament) overseen by religious authorities. All laws had to conform to Islamic standards.
Social: A strict interpretation of Shia Islam dictated public life. Women's rights were rolled back, mandatory veiling was imposed, and Western cultural influence was purged.
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