There are two main focuses of this dissertation; First: An analysis of Islamic legal foundations in Muslim society and Islamic State that uphold social justice among the Muslims and non-Muslims through legislative power. Second: A study of the extent of similarities between the Islamic principles and legislative power in Malaysia, which is based on democracy. The study basically applies a comparative method. The purpose of Islamic law is to protect the interest of human beings. Thus. it maintains a just society that secures justice, equality and prosperity of the individuals and society. However, the details of its application are left to the people to decide in order to suit their changing needs and there is no collision with the principles of Malaysian government as there is no specific legislative system in Islam. The dissertation affirms the universal nature of Islam that suits humanity in all aspects: physical and spiritual, time and place with a flexible form of government. The dissertation concludes with basic principles of Islamic legislative system that consist of Ijma, Shura, Ijtihdd, supremacy of constitution, leadership accountability and the rejection of injustice. There are some similarities between Islam and democracy. However, the principles of government and the protection of human rights are part of the religion of Islam. This ensures justice and protects the people against any abuse of legislative power. Apart from similarities, some contradictions are also found and need to be addressed objectively.