Indonesia had a brief experience with democracy from 1950-59, followed by 40 years of authoritarian rule, and since 1999 has entered a new fragile phase of democratic government. This chapter explores the difficulties that Indonesia has experienced in its attempt to establish a viable synthesis between Islamic political movements and ideas and the state. It presents a brief exposition in order to provide a foundation that will allow the author to put the issue of the relationship between Islam and the state into context. It is important to note, however, that Indonesian Islamic legalism and formalism did not evolve out of a vacuum. To a large extent, these thoughts and actions were driven by negative encounters with the West, most notably Dutch colonialism. The perspective of democracy centred on culture tends to see Islam as inimical to the competitive system of governing.