What most of us mean when we talk about an “Islamic state” is a righteous society in which Imaan flourishes and social relations are governed by taqwa.
The problem is, Imaan cannot be regulated. Taqwa cannot be imposed by the state. It is the nature of human beings, and the nature of Imaan itself, that Imaan increases and decreases in our hearts.
That doesn’t mean that government cannot promote those services and conditions in society which facilitate the increase of Imaan in our hearts; of course it can; but a great proportion of what we all envision an Islamic state to look like has much more to do with individuals than with government.
The righteous government of Emir-ul-Mu’mineen ‘Uthman bin ‘Affan could not instill sufficient taqwa in the hearts of the people to prevent their criminal rebellion against him; and we will not see a ruler better than ‘Uthman.
The point is, we need to be clear within ourselves about what government can and cannot do, and to what extent building an Islamic society actually depends upon our own selves, our own Imaan, and our own behavior towards others.