Theocracy, according to the dictionary, is the “government of a state by immediate divine guidance or by officials who are regarded as divinely guided.” The Oxford English Dictionary has this definition:
A form of government in which God (or a deity) is recognized as the king or immediate ruler, and his laws are taken as the statute-book of the kingdom, these laws being usually administered by a priestly order as his ministers and agents; hence (loosely) a system of government by a sacerdotal order, claiming a divine commission; also, a state so governed.
The word theocracy originates from the Greek θεοκρατία meaning “the rule of GOD”. This in turn derives from θεός (theos), meaning “god”, and κρατέω (krateo), meaning “to rule.” Thus the meaning of the word in Greek was “rule by god(s)” or human incarnation(s) of god(s).
The term was initially coined by Flavius Josephus in the first century A.D. to describe the characteristic government of the Jews. Josephus argued that while mankind had developed many forms of rule, most could be subsumed under the following three types: monarchy, oligarchy, and democracy. The government of the Jews, however, was unique. Josephus offered the term “theocracy” to describe this polity, ordained by Moses, in which GOD is sovereign and his word is law.
Josephus’ definition was widely accepted until the Enlightenment era, when the term started to collect more universalistic and negative connotations, especially in Hegel’s hands. The first recorded English use was in 1622, with the meaning “sacerdotal government under divine inspiration” (as in Biblical Israel before the rise of kings); the meaning “priestly or religious body wielding political and civil power” is recorded from 1825.