Yes the Islamic "government" is a reward for individuals practicing, forming communities which are practicing. The governments were there to allow freedom of religion and protect the community. It was not historically involved in the implimentation of sharia, so this conflaguration between a State and Shariah is a modern doctrine. This modern interpretations brings the muslim world into the modern "State" definition, using "khilafah" groups to futher the cause. Like you said this leads to unhealthy communities. The muslims have no experience of anything other than state beuracracies disguised as democracies, or secular/theocratic dictatorships.