The major problems which were confronted at the time were; the existence of a corrupt and incompetent administration, unjust social privileges and a wide financial gap between the rich and the poor. Thus, Imam Ali's reforms covered these three major fields.
All previous governors were instantly expelled from their posts. And the following people were put in charge, Uthman ibn Haneef for Basrah, Sahl ibn Haneef for Syria, Qais ibn Saad ibn Ubadah for Egypt and Mousa Al-Ashari for Kufa. It is noteworthy that all the mentioned governors were not from Quraish tribe, and this was bitterly taken by Quraish who were accustomed to ruling and getting the lion’s share of money and authority.
It is also not out of place to mention that the new governors were not only known for their piety and good conduct, but also possessed sound administrative abilities. However, it must be taken into account that the conditions in which they were operating and the unstable situation of that period gave them no chance to fully manifest their talents. But still the marks which they left in the society were so deep that they survived and were remembered for generations.
The rights of Muslims whether social or financial were carefully observed and protected. Thus Imam Ali (as) declared "O people, I have the same rights and obligation as the rest of you". Therefore, he cut the way of every intruder who wanted to exploit his position or kinship or religious reputation.
Imam Ali also stated, "It should be known that whoever is an immigrant (Muhajir) or a supporter (from Ansar) who accompanied the Prophet (S), and think he is better than others for his companionship, then his goodness will be rewarded by God in the Hereafter. Every person who believes in God and His Prophet is entitled to the same rights and obligations. Money belongs to God which must be divided equally among people. No one will get a greater share than others, those pious people would get their reward in the Hereafter'".
The extravagant monetary policy of Uthman accumulated the treasury’s wealth among his relatives and associates, which had seriously imbalanced the society, so when Imam Ali (as) came to power, he had to take some drastic measures against this existing imbalance.
Thus he warned all people, "I shall follow the Prophet's Tradition and execute whatever he had commanded, every gift of which Uthman gave of God's money will be returned to the treasury. Nothing will cancel its belonging to the treasury even if it was married with, or distributed in the wide country. Justice must be implemented, if someone feels hard to accept justice then injustice is harder to accept".
Moreover, he condemned prodigals who run after the pleasures of this life only while disguising in religious masks. In this respect Imam Ali said, "There are some people whom life has absorbed completely. They have built many houses, made rivers, rode beautiful horses, and took to themselves slave-women which brought disgrace upon themselves. Whenever I prevent them from indulging in bad deeds and give them no more than their rights, they turn angry and object furiously. They say 'Ali ibn Abi Talib has prevented us our rights".
Imam Ali’s new policies were aiming at stripping the Quraish completely of their social privileges, financial statuses and authority. This irritated the Quraishite as they no longer enjoyed their garden of Iraq and the rest of the Muslim country and what they have already gained was in danger of being restored to the Muslims’ treasury.
The Quraish not pleased with this new regime and worked continuously to hinder the stabilization of the new authority. Dissents were sent and wars were launched successively, shaking the whole state; economically, socially, politically and morally. Meanwhile, the heads of Quraish who were campaigning against Imam Ali's rule, realized it was not Imam Ali as a person they were fighting, but it was the ideals and policies which he (as) had advocated, it was once again Islam.
Thus the Umayyad's who accepted Islam under various conditions, found that their materialistic thinking couldn’t reconcile with Islamic values, so they decided to distort the Islamic values and ideals, since opposing Islam openly was fatal, as they had experienced previously. Muawiya then ordered the formation of a committee to fabricate Hadiths and distort the interpretation of Qur'an.
Five years had lapsed, which were full of violent events; the battle of camel in Basrah, the battle of Sifsin against Muawiya, the battle of Nahrawan against Khawarij and many other ongoing campaigns. Thus the opposition was able to feed unrest practically in every part of the Islamic State, shaking the authority of the new administration.
Finally Imam Ali (as) was murdered at Kufa mosque and Muawiya was given access to rule the whole country. The circumstances in which Muawiya assumed power will be discussed promptly.