A professor recently claimed that while Quaid-i-Azam outright rejected theocracy, he did talk about an 'Islamic State' sometimes and not just a 'Muslim State', implying that there was a contradiction. Looking at history reveals that both terms were mostly used differently and interchangeably in the past, unlike today. In recent decades, due to the war on terror, now a person from a secular state has to explain that his country is Muslim and not Islamic; while in the 20th century, the proper term for a religious state was 'Theocracy' or 'Theocratic State'. The hybrid system that we in Pakistan have today was called 'Theodemocracy.'
Most of the time, Jinnah used the term "Muslim State" for Pakistan - but a handful of times he also used the term "Islamic State." Whenever Jinnah used the term Islamic State, he clarified in the following sentences that by that he merely meant a state of a Muslim majority that followed the principles of social justice, equality and brotherhood instead of a religious state with regressive laws. “Pakistan is the premier Islamic State [...] Islam has taught equality of men, justice and fair play to everybody [...] In any case, Pakistan is not going to be a theocratic state to be ruled by priests with a divine mission. We have many non-Muslims [...] but they are all Pakistanis. They will enjoy the same rights and privileges as any other citizens,” he explained.
He also used the term "Islamic" for Turkey, even though it was secular. In fact, in the same speech, he used both terms, Muslim and Islamic, one after another. “Another great figure [...] that has passed away is Mustafa Kemal Ataturk. His death has come as the greatest blow to the Muslim World [...] In Kemal Ataturk, the Islamic world has lost a great hero," he said while missing the late Ataturk.
There is a famous interaction of Jinnah with the Raja of Mahmudabad where the former said that Pakistan would "not be an Islamic State" but a "Liberal Democratic Muslim State." It's important to remember that in this case, Jinnah criticised Mahmudabad’s interpretation of the Islamic State as the exact words the latter used were "Islamic State with the Sunnah and Sharia as its bedrock" and not just an Islamic State with the Muslim majority.
Another example of both terms being used interchangeably is the prominent former Muslim Leaguer Sirdar Shaukat Hyat Khan's book 'The Nation that Lost its Soul'. In it, he described Pakistan as a "Liberal Islamic State." Jinnah's greatest adversary Jawaharlal Nehru also used to call Turkey a secular Islamic State. In his letter to a Leaguer SA Latif, dating 25 December 1939, Nehru stated, “Where democracy is creeping into the Islamic States, it is on the basis of modern scientific political theory which separates the state from religion, though keeping religion intact for the individual and the group. Turkey is an outstanding example of an Islamic State."
But words aside, a politician is defined by his actions, and they need to be looked at as well. Starting with education: In November 1947, Pakistan's Educational Policy was revealed in a conference presided by Quaid-i-Azam. After his brief address, the Minister of Education Fazlur Rehman, a liberal politician from Bengal, rose and told the people, "The impression that Pakistan being an Islamic State is a Theocratic State is being sedulously fostered in certain quarters with the sole object of discrediting it in the eyes of the world." He criticised the concept of the Church and using religion as a state policy by continuing, "Islam has not sanctioned government by a sacerdotal class deriving its authority from God [...] The ruler far from being a vice-regent of God on earth is but a representative of the people who have chosen him to serve them."
Later, to promote tolerance among different communities, an inclusive syllabus was revealed in the April of 1948. "The spirit of toleration and understanding which is sought to be inculcated amongst the students is manifest from the fact that in the category of prophets and reformers besides the Muslim prophets, the lives of Krishna, Buddha and Guru Nanak are included. Stories about Mahatma Gandhi, Quaid-i-Azam, Maulana Mohammad Ali, Ibne Saud, Kemal Ataturk and Raja Ram Mohan Roy will be part of the study,” Dawn newspaper reported.
The educational system was important to mention because it's one of the most important pillars of a civilised society as it lays the foundation for future generations. For example: If the educational system is liberal and secular then the politicians that will emerge under it will also be from the same school of thought. Speaking of secularism: Different states have different kinds of religious issues, and to solve them they adopt different forms of secularism to observe impartiality.
In Britain, Anglican Christianity is the official religion, and the monarch has to be a Protestant Christian; however, the Chief Executive can be of any religion and the constitution promotes equal rights for its citizens. It's a Christian state culturally, which means the calendar, economic system, traditions, holidays, moral values etc are derived from Christianity, but it's impartial at the same time, which is the main reason behind a Hindu being elected as their Prime Minister.
Similarly, Denmark officially recognises the Lutheran Church and directs the state to protect their Christian values. In reality, Denmark is considered one of the most secular states on earth with the highest living standards and one of the most non-religious societies. Bangladesh classifies itself as a secular state but has Islam as the state religion. If there's a contradiction or a clash, then the state upholds Secularism. The United States is a secular state, but it doesn't use that word in the constitution. Instead, its First Amendment, which promises freedom to practise any religion, classifies it as a secular state in the eyes of the world despite having one of the most conservative societies in the West.
Similarly, Pakistan had its own version of Secularism when it came into being in 1947. On the request of Quaid-i-Azam, the references to God were removed from the oaths of the Prime Minister, Governor-General and other offices. The word 'Swear' was also replaced with 'Affirm'. In other secular states, theists swear an oath while non-believers affirm. Often the Holy Book belonging to the religion of the office holder is also used during the oath-taking ceremony. Jinnah removed religious oaths entirely; so, even a theist had to affirm the oath like a non-believer. This was done to keep religious matters personal, so even during an oath-taking ceremony a person isn't forced to reveal his religious beliefs.
Apart from prioritisation of competence over religious beliefs, it was also good for safety purposes. Ahmadis played a vital role in the creation of Pakistan and the atheists of South India from Shudra Caste were also against Congress and were allies of the Muslim League. Jinnah most likely wanted their lives and careers protected in a conservative society by keeping their views on religion a secret. He himself also affirmed an oath like a non-believer when he took charge of the Governor-General's office to set an example, even though he was a Muslim. Speeches about Secularism including the 11 August speech were just the icing on the cake.
Jinnah's followers often wrote to him complaining about Pakistan being based on Western democracy. They claimed that it was against the principles of Islam. He responded in the vocabulary they understood best by stating that Islam taught them democracy 1300 years ago; so, while Pakistan wasn't against Islamic principles, it also wouldn't become a theocracy. This was also done by Ataturk, even though he was inspired by Laicism (aka Militant Secularism) instead of moderate British Liberalism which had inspired Jinnah.
In the early years of Modern Turkey, he, unlike Jinnah, had declared Islam as the state religion and he was of the opinion that "the Mohamedan religion includes the freedom of religious opinion," hence, the state religion wouldn't clash with Turkey's secular structure. He also gave people the translated Holy Qurans to minimise the influence of the Arabic language. Today there's a lobby in Turkey that uses these actions to prove that Ataturk was a practising Muslim to justify the Islamisation of Turkey.
Hence, before starting any debate, it's important to agree on the interpretation of certain terms. Otherwise, the discussion becomes confusing and about the battle of labels rather than being something meaningful. The discussion should be about finding the truth and not about being dragged down by labels.