Contemporary Iran is in many ways a mystery to the west and demonised as a country of reactionaries and terrorists. I'll not be the judge of whether that characterisation is fair or not but a bit more background information should help shed more light on the character and circumstances of the Iranian state.
After the Islamic Revolution of 1979, the decidedly secular constitution of the last Shah was unsuitable for the new Islamic regime and a new one was written, based partly on the older one of 1906 which created a powerful clergy. The 1979 one is somewhat paradoxical in that it on one hand vests maximum power in the clergy but on the other hand sanctions a decidedly western form of parliamentary republic whose character appears to be somewhat in conflict with Sharia in that it allows the election of leaders rather than let them be appointed "by the grace of God."
The 1979 constitution, notwithstanding its slightly schizophrenic character, is, for the most part, well thought out and consistent with a modern republic, though it digresses to address issues of particular importance in that part of the world such as Sharia law and foreign ownership of natural resources. Interpretation of the Qu'ran is often liberal compared to other countries in matters such as the rights of religious minorities (for example, it recognises Zoroastrianism although it is not an Abrahamic religion) with the express stipulation that minorities not be harassed and be permitted to conduct their worship and follow their traditions. It also follows the Qu'ran in guaranteeing women very specific rights which may not be brilliant by western standards but which other Islamic fundamentalist countries deny them. Its politico-economic character is close to socialism with its provisions for a welfare state and strong state control of the economy.
The fundamental weaknesses of this constitution are that it creates a poor balance of power with a supreme leader and a guardian council given the authority to more or less rule by decree against the will of all other authorities and, while supposedly guaranteeing fair trial rights, permits courts of substandard composition where the prosecutor can also be judge. The imbalance of power is critical to inhibiting the activities of reform-minded officials such as Hashemi Rafsanjani and Mohammed Khatami and looks like the most likely cause of future dissent and strife, especially with Ali Khameini enjoying much less popular approval than Khomeini. The imbalance coincides with positions the Ayatollah Khomeini had expressed before the revolution. His motives were sincere and probably benign by the standards of a theocratic regime but he placed too much faith in his own and his successors' abilities to remain guardians instead of governors. Ultimate power has, since the revolution, been in the hands of ultra-conservative Islamic clerics. In fact, this situation was enhanced by the revision of 1989 which concentrated power in the hands of even fewer people than the 1979 constitution did.
The Constitution of the Islamic Republic of Iran
Sources:
Iranian embassy in Ottawa
Neil Shevlin, University of Pennsylvania
Analysis personal. IANAL or constitutional scholar.