My understanding is that in Sufism one is initiated into the tariqah by a Sheikh, and that one is bound to follow his rulings. Is this correct? In practice what does this mean?
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I think it's more like: the sheikh is a spiritual guide that will, through some a'maal (like reading tasbih, quran, meditation, etc.), help you to become a better muslim. A good metaphor is : to go from point A (where you are) to point B (closer to Allah's pleasure), you can use a map (quraan and ahaadith) or take a guide (sheikh).
But remember that you should follow the Sheikh's ruling only if it's not in contradiction with Shariah...
Its based on the fact that each individual is not possibly able on his own to take decision on the matters of Islam.
Because then that will get him closer to iblees. As iblees is the one who made first self opinion on dheen. (that he is better than Adam (a.s) coz, he is made of fire, and Adam (a.s) is made of mud)
So, basically according to what the Imams of past who did the thafseer of Quran said, "It is obligatory to find a Sheikh and live under his ruling", only that we must Ask Allah to show us a True Sheikh.
A sheikh is one who has a sheikh, and so he has a sheikh....and the chain goes and reaches Sahabath, and thus Prophet Muhammed (s.a), Allah. As Allah is the Sheikh of Prophet (s.a).
Unfortunately the modern organisation-based Islam has deviated from the traditional Islam. As they speak much less of this to Every Individual muslims Wonder!