Tracing its earliest theology to the lifetime of Muhammad, Ismailism rose at one point to become the largest branch of Shī‘ism, climaxing as a political power with the Fatimid Caliphate in the tenth through twelfth centuries. Ismailis believe in the oneness of God, as well as the closing of divine revelation with Muhammad, whom they see as "the final Prophet and Messenger of God to all humanity". The Ismāʿīlī and the Twelvers both accept the same initial Imams from the descendants of Muhammad through his daughter Fatimah and therefore share much of their early history. Both groups see the family of Muhammad (the Ahl al-Bayt) as divinely chosen, infallible (ismah), and guided by God to lead the Islamic community (Ummah), a belief that distinguishes them from the majority Sunni branch of Islam.
After the death of Muhammad ibn Isma'il in the 8th century CE, the teachings of Ismailism further transformed into the belief system as it is known today, with an explicit concentration on the deeper, esoteric meaning (batin) of the Islamic religion. With the eventual development of Twelverism into the more literalistic (zahir) oriented Akhbari and later Usuli schools of thought, Shi'i Islam developed into two separate directions: the metaphorical Ismaili group focusing on the mystical path and nature of God, with the "Imām of the Time" representing the manifestation of esoteric truth and intelligible reality, with the more literalistic Twelver group focusing on divine law (sharia) and the deeds and sayings (sunnah) of Muhammad and the Twelve Imams who were guides and a light to God. Ismaili thought is heavily influenced by neoplatonism.
Though there are several paths (tariqat) within Ismailism, the term in today's vernacular generally refers to the Nizaris, who recognize Aga Khan IV as the 49th hereditary Imam and is the largest Ismaili group. In recent centuries Ismāʿīlīs have largely been a Pakistani and Indian community, but Ismailis are also found in Bangladesh, Malaysia, Syria, Iran, Saudi Arabia, Yemen, Jordan, Iraq, East Africa, Angola, Lebanon, and South Africa, and have in recent years emigrated to Europe, Canada, Australia, New Zealand, the United States, and Trinidad and Tobago. There are also a significant number of Ismāʿīlīs in Central Asia.
Ismailism shares its beginnings with other early Shi‘i sects that emerged during the succession crisis that spread throughout the early Muslim community. From the beginning, the Shia asserted the right of Ali, cousin of Muhammad, to have both political and spiritual control over the community. This also included his two sons, who were the grandsons of Muhammad through his daughter Fatimah.
The conflict remained relatively peaceful between the partisans of ‘Ali and those who asserted a semi-democratic system of electing caliphs, until the third of the Rashidun caliphs, Uthman was killed, and ‘Alī, with popular support, ascended to the caliphate.
Soon after his ascendancy, Aisha, the third of the Prophet's wives, claimed along with Uthman's tribe, the Ummayads, that Ali should take Qisas (blood for blood) from the people responsible for Uthman's death. ‘Ali voted against it as he believed that situation at that time demanded a peaceful resolution of the matter. Both parties could rightfully defend their claims, but due to escalated misunderstandings, the Battle of the Camel was fought and Aisha was defeated but was respectfully escorted to Medina by Ali.
Following this battle, Muawiya, the Umayyad governor of Syria, also staged a revolt under the same pretences. ‘Ali led his forces against Muawiya until the side of Muawiya held copies of the Quran against their spears and demanded that the issue be decided by Islam's holy book. ‘Ali accepted this, and an arbitration was done which ended in his favor.