Onkara, here are my views...
Let me first try to elaborate what I feel is the requirement of Islam. By the Islamic concept of surrender, it is not simply meant that there is divine deity (Allah) and we must bow ourselves to its wishes. That is an over simplification and in fact a flawed understanding of Islam, according to me.
According to the Quran, everything has a natural attitude which is primordial to it. The Absolute ("...(God is), the Absolute -112:2 ") or the really real behind everything is what Muslims mean by God ("Whersover you may look there is the face of God"-2:115). To say Allah is to use a symbol, what really matters is the Reality behind the name. ("It is all the same whether you call Him God or the Beneficent. All the good names belong to Him." - 17:110) Everything in the universe is the state of harmony with this Reality. It follows the path chartered out for it, and hence reflects this Reality back. The Quran calls this speaking of God's glory by the universe "The seven heavens and the earth, and all beings in there, speak His Glory: There is not a thing which does not celebrates His Praise; And yet you do not understand how they declare His Glory! -17:44". The primary message of the Prophet was simply to make people recognize this natural urge in them, and to pursue it. The urge takes them on the path of righteousness. It makes them just and true, kind and humble, and receptive to the real Reality of God. Thus Islam is call for harmony with that primordial state. You can translate Islam as "peace" which in the above sense, is the state when everything is in harmony (or in a state of surrender) to this primordial state.
And now my (controversial
) view on implementing this Islam in daily life.
In my view any particular system of government, as long as it is based on just and true ideals, is as perfectly a part of Islam as any other.
I do not agree that the shariat as given by Muhammad (pbuh) of today is what is the only Islamic way of life.("And they say, "None but Jews or Christians shall enter Paradise" ; This is their wish. Say : Give your proofs if ye speak the truth. But they who set their face with resignation God-ward, and do what is right, -their reward is with their Lord ; no fear shall come on them, neither shall they grieve" 2: 111-2)
In my view the Quran never asks people to give up their former religions, and in fact never brought about a new religion at all.
("Verily, they who believe (Muslims) and they who follow the Jewish religion, and the Christians, and the Sabaeana - whosoever believeth in God and the last day, and doeth that which is right, shall have their reward with their Lord : fear shall not come upon them, neither shall they grieve.2:62".
Throughout the Quran the message is always to ask people to discard wrong doings and turn towards God. According to it, if they did so and returned to the original teachings of whatever religion they were following they would have found that it was the same Islam to which Muhammad (pbuh) was calling them too. Din or the real religion of God is devotion to God and righteous living. Whatever be the race or community or country one belonged to, if only he believed in God and did righteous deeds, he was a follower of the Din of God, and salvation was his reward.The Quran condemns the Jews and Christians of Prophet Muhammad's time who had divided themselves into groups on the basis of religion and had devised codes of conduct exclusive to themselves. Such people had relegated the concept of faith and righteousness in the background by devising and splitting up into "religions". This defeated the purpose itself in a sense. For example a person who was good and an ardent devotee of God, if he was not a Christian was thus considered outside the circle of the ones being saved by th Christians, and on the other hand even if he was wicked though professed to be a Christian could still hope for salvation in the end. This groupism was rejected by the Quran which had a message for all humanity: Be good and turn towards God and you will be rewarded.
"Others of the people of the Book say : "And believe in those only who follow your religion." (But you) Say: "True guidance is guidance from God'- that to others may be
imparted the like of what hath been imparted to you. Will they wrangle then with you in the presence of their Lord ? Say : "Plenteous gifts are in the hands of God. He imparteth
them unto whom He will, and God is bounteous, wise."-3:73-4
"Moreover the Jews say, "The Christians lean on nought". "On nought lean the Jews", say the Christians. Yet both read the Scripture. So with like words say they who have no
knowledge (of the Scripture). But on the day of requital, God shall judge between them as to that in which they differ."-2-113
So, in effect the Islamic way of life is not unique externally, internally however, since it is just the way of recognizing the metaphysical Reality and coming in tune with It, it is unique.
With this understanding, I feel that any nitty gritty of a particular system of governance as long as it is based on principles which our conscience proclaims to be righteous is as much part of Islam as is the Political Shariat shown by Prophet Muhammad(pbuh).
Finally, note that the above view is not originally mine, but has been developed by Sufi Saints (Hazrat Nizamuddin Awliya, Mazhar Jan-i-Janan, Shah Waliullah) and scholars such as Mawlana Abul Kalam Azad. It is known in the literature as wahdat-e-deen (Unity of Religions)
Regards