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In Theocracy, a form of government, the institutions and people that govern the state are very close to the leaders of the main religion. If the religious leaders do not directly run some bodies of the state, they influence them very much. The word theocracy comes from two Greek words literally meaning God-government, and meaning the government is run by "The Church".
Modern-day states that resemble Theocracies
Iran is a theocratic republic. In Iran, two bodies, the Supreme Leader and Guardian Council consist of members who are not elected by the people. These two bodies are staffed by Shia clerics. The highest elected official is the President of Iran.
Some people see traits of theocracy in Israel. This is because rabbinical law and civil law must be mixed for certain aspects. Also, the state hires rabbis. These rabbis also have civil duties, not only religious ones.