During the period starting from middle of the seventh century, Islamic conquests of vast areas, ranging from the eastern shore of the Atlantic to Afghanistan, forced Muslims to contemplate international relations and the concepts of war and peace. At that time, the Islamic empires, such as the Umayyad and Abbasid dynasties, established rules regulating the relationship between themselves and their neighbors, essentially dividing the world into two camps: Dar al-Islam (House of Islam), areas governed by norms of Islam, and Dar al-Harb (House of War), areas where Islam did not govern. Later, when the Islamic empire began to enter into treaties with neighboring kingdoms, the concept of Dar al-Aman (House of Safety) was introduced as well.
The violent injunctions of the Quran and the violent precedents set by Muhammad set the tone for the Islamic view of politics and of world history. Islamic scholarship divides the world into two spheres of influence, the House of Islam (dar al-Islam) and the House of War (dar al-harb). Islam means submission, and so the House of Islam includes those nations that have submitted to Islamic rule, which is to say those nations ruled by Sharia law. The rest of the world, which has not accepted Sharia law and so is not in a state of submission, exists in a state of rebellion or war with the will of Allah. It is incumbent on dar al-Islam to make war upon dar al-harb until such time that all nations submit to the will of Allah and accept Sharia law. Islam’s message to the non-Muslim world is the same now as it was in the time of Muhammad and throughout history: submit or be conquered. The only times since Muhammad when dar al-Islam was not actively at war with dar al-harb were when the Muslim world was too weak or divided to make war effectively. (Islam101)
Muslim scholars’ definitions of Dar al-Islam vary. According to some, a country is classified as Islamic when that country either relies on Shari’a as the basis of its legal system or incorporates some aspects of Shari’a into its secular legal system. Saudi Arabia, the Gulf states, Pakistan, and Iran are considered to be examples of these approaches. Another group of scholars believes that Dar al-Islam also includes countries of Muslim majorities even if their governments do not incorporate Shari’a into their legal system, such as Egypt, Syria, and Turkey.3 A third faction of Muslim scholars maintains that a territory can be labeled as Dar al-Islam if the Muslim population living there enjoys peace and security
The term Dar al-Harb goes hand in hand with the term jihad. One of the Sunni jurists of the Maliki school of thought, Ibn Arafa, defines jihad as warfare waged by Muslims against non Muslims for the purpose of elevating the word of God if the enemies are against God’s presence, or as retaliation for the conquest of a Muslim territory. Essentially, according to Ibn Arafa, jihad is necessary to suppress aggression against Muslims.11 It appears that many Islamic scholars support this principle by referring to verse in the Quran that states: “Permission [to fight] has been given to those who are being fought, because they were wronged. And indeed, Allah is competent to give them victory.” Source: George Sadek (loc.gov)
See also WikIslam here.