Divisions of the world in Islam
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The notions of "houses" or "divisions" of the world in Islam such as Dar al-Islam and Dar al-Harb does not appear in the Quran or the Hadith. According to Abou El Fadl, the only dar the Qur'an speaks of are "the abode of the Hereafter and the abode of the earthly life, with the former described as clearly superior to the latter".
In classical Islamic law, the major division are dar al-islam (lit. territory of Islam), denoting regions where Islamic law prevails, dar al-sulh (lit. territory of treaty) denoting non-Islamic lands which have concluded an armistice with a Muslim government, and dar al-harb (lit. territory of war), denoting adjoining non-Islamic lands whose rulers are called upon to accept Islam.
Early Islamic jurists devised these terms to denote legal rulings for ongoing Muslim conquests almost a century after Muhammad. The first use of the terms was in Iraq by Abu Hanifa and his disciples Abu Yusuf and Al-Shaybani. Among those in the Levant, Al-Awza'i was leading in this discipline and later Shafi'i.
The concept of dar al-harb has been affected by the political fragmentation of the Muslim world and has little significance today.
Major religious divisions
Dar al-Islam (Arabic: دار الإسلام literally house/abode of Islam; or Dar as-Salam, house/abode of Peace; or Dar al-Tawhid, house/abode of monotheism) is a term used by Muslim scholars to refer to those countries where Muslims can practice their religion as the ruling sect. It is the area of the world under the rule of Islam, literally, "the home of Islam." These are usually Islamic cultures wherein Muslims represent the majority of the population, and so the government promises them a privileged status. Most Dar al-Islam areas are surrounded by other Islamic societies to ensure public protection.
Some modern Muslim scholars believe that the labeling of a country or place as being a part of Dar al-Islam revolves around the question of religious security. This means that if a Muslim practices Islam freely in his place of abode, even though that place happens to be secular or un-Islamic, then he will be considered as living in the Dar al-Islam. Yet, the majority opinion, which relies on tradition, claims that only countries ruled by Sharia can be considered true "abodes of peace."
- Muslims must be able to enjoy peace and security with and within this country.
- The country should be ruled by a Muslim government.
- It has common frontiers with some Muslim countries.
Dar al-Harb (Arabic: دار الحرب "house of war". Dar al-Harb is a term classically referring to those countries which do not have a treaty of nonaggression or peace with Muslims (those that do are called Dar al-'Ahd or Dar al-Sulh). 
According to Majid Khadduri, the fundamental distinction between Dar al-Islam and Dar al-Harb was introduced after the defeat of the Umayyad Caliphate at Battle of Tours in 732 which prevented the expansion of Islam to the north, while at the same time the expansion of the caliphate to the east had been halted.
Wahbah al-Zuhayli argues that the concept of Dar al-Harb in mostly historical: "The existence of Dār al-Islām and Dār al-Ḥarb in contemporary times is rare or extremely limited. This is because Islamic countries have joined the United Nations covenant that stipulates relationship between nations is peace and not war. Therefore non-Muslim countries are Dār al-‘Ahd …"
Dar al-'Ahd, Dar al-Sulh
Dar al-'Ahd (Arabic: دار العهد "house of truce") or Dar al-Sulh (Arabic: دار الصلح "house of conciliation/treaty") are terms used for territories that have a treaty of non-aggression or peace with Muslims. 
This designation can be found in the Quran, where Muslims are directed on how they should act in war:
"Excepting those who join a people between whom and you there is a treaty, or such as come to you with hearts reluctant to fight you, or to fight their own people. Had Allah wished, He would have imposed them upon you, and then they would have surely fought you. So if they keep out of your way and do not fight you, and offer you peace, then Allah does not allow you any course [of action] against them." Quran 4:90
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