Theocracy
Government ruled by a divine means or by leaders considered to be divinely guided. Israel was a theocracy before King Saul. The Islamic Republic of Iran is a modern-day theocracy, as many commentators believe that the real power in its government lies not in democratically-elected leaders like Mahmoud Ahmadinejad but in clerics within the government.
The Islamic Republic of Iran is widely considered to be a modern-day theocracy under the second definition provided above, as most commentators believe that the real power in its government lies not in democratically-elected leaders like Mahmoud Ahmadinejad, but in clerics within the government. It is also possible to have a so-called 'grass roots' theocracy, in which a large number of believers can strongly influence government policy, even in a supposedly secular or atheistic state, such as the USSR.
In truth, all governments are theocracies, as no person or political body can gain power without God's assent- however, a direct theocracy in which 'priest' and 'politician' are synonymous is preferable in God's sight.