I. The Fatimid Dynasty and its Origin
The Fatimid movement, a branch of Shia Islam, started with an Ismaili sect in Salamiyah, in Syria, and the eighth imam, Abdullāh ibn Muḥammad ibn Ismā'īl. Through his father, the seventh imam, he claimed to descend from Ali, the first Shi'ite imam, and the Prophet Mohammed's daughter Fatima. Thus his name became "al-Fātimiyyūn".
Over time, the Abbasid Caliphate came to see the Isma'ili Shi'ites as a threat and their teaching as heresy. A supporter of the eleventh imam began spreading Ismailism in North Africa. It particularly affected the Berber population in present Algeria, and spread from there over large parts of the Maghreb (present Algeria, Tunisia and Libya). Abdullah al-Mahdi Billah, the eleventh imam, moved his centre from Salamiyah in Syria to North Africa and became the first ruler, Imam and Caliph of the New State, and founder of the Fatimid Dynasty. In 921, they established a capital, Mahdia, in current Tunisia. In 948, they moved their capital to al-Mansuriya, also in present Tunisia. When, in 969, they conquered Egypt, it quickly became the centre of the new empire, the Fatimid Caliphate, and they founded Cairo as their new capital.
The Ismailites have bifurcated several times by various schisms, based on which imams they recognise. A branch, Nizari, counts succession from Nizari, the eldest (from a palace in Egypt displaced) son of al-Musta'lī bi-llāh. That line is still alive. Its current representative is Shāh Karīmu-l-Ḥussaynī Āgā Khān IV.
Another interesting fact is that the Druse religion indirectly stems from the sixth Fatimid Caliph, when the Founder of the Druse, Ad-Darazi, in 1080, declared that Abu Ali al-Manṣūr al-Hākim bi-Amr Allāh was an incarnation of God.
II. The Only Shi'ite Caliphate in History
Fatimid time in Egypt began in 969 AD, when the Fatimids incorporated the country in the caliphate they had already established in parts of North Africa and Sicily. The arriving Fatimids, who were Shia Muslims (the only caliphate in history which was not Sunni Muslim), built a new capital at the Nile: al-Qāhirah, Cairo. The caliphate then grew eastwards, at the expense of the Abbasid Caliphate, which was pushed back.
From around 1060, the territory began to decline again, and Egypt, its centre, was shaken by various conflicts. Banu Hilal, an Arab Bedouin tribe, was sent to North Africa in order to force back to the Fatimid Caliph a group of people who suddenly had decided to recognise the Abbasid Caliph in Baghdad instead. This became the beginning of an Arabization of North Africa and a large Bedouin presence, which became permanent.
Turkish expansion and the Crusades gradually came to press back the Fatimids, and internally the caliphs lost power to their viziers. The last vizier was a certain Saladin, who would end Fatimid time in Egypt, taking the formal position as Sultan, starting its own Ayyubid dynasty and returning Egypt to Sunni Islam. (That was the famous Saladin, who is generally known for his encounters with Richard Cœur de Lion. But apart from that he ended the Fatimid Caliphate, his story is outside the scope of this article. I will return to him on a later occasion.)
In 1171, Saladin dissolved the Fatimid Caliphate and the Friday prayer in Cairo was held in the name of the Abbasid Caliph.
Fatimid time was one of Egypt's many cultural peaks. Science, philosophy and different kinds of learning flourished. Various directions of Islam were tolerated, and, although a large part of the upper class was Shi'ite (the branch known as Isma'ili Shi'ites), the population in general were Sunni Muslims. However, Shia still has a fairly large presence in Egypt, although the followers maintain a low profile. Shi'ites are consciously opposed to the establishment. However, in some layers of the Sunnite majority, there are remaining elements of Shi'ite traditions, probably without themselves being really aware of it. The most pure Sunnites are the many Salafists.
In Cairo there are a lot of architectural remains from the Fatimid era. The most striking are the Al-Hakim Mosque and Al-Azhar.
(Below, a map over the Fatimid Caliphate, created by Jemeldz, licensed under CC BY-SA 4.0.)
Appendix; The Imams and Caliphs of the Fatimid Dynasty:
(This is not strictly quoted, the explaining text is mine, but lists of the rulers can be found in several places, so I place this within quotation blocks.)
Abdullah al-Mahdi Billah (909-934). Founder of the dynasty.
Abū l-Qāsim Muḥammad al-Qā'im bi-Amr Allāh (934-946).
Abū Ṭāhir Ismā'il al-Manṣūr bi-llāh (946-953).
Abū Tamīm Ma'add al-Mu'izz li-Dīn Allāh (953-975). Egypt was conquered 969.
Abū Manṣūr Nizār al-'Azīz bi-llāh (975-996).
Abū 'Alī al-Manṣūr al-Ḥākim bi-Amr Allāh (996-1021).
Abū'l-Ḥasan 'Alī al-Ẓāhir li-I'zāz Dīn Allāh (1021-1036).
Abū Tamīm Ma'add al-Mustanṣir bi-llāh (1036-1094).
Al-Musta'lī bi-llāh (1094-1101). Disputes about the succession led to the Nizari schism.
Al-Āmir bi-Aḥkām Allāh (1101-1130). He was the last Fatmid ruler in Egypt who was recognised as imam by all Ismailites.
'Abd al-Majīd al-Ḥāfiẓ (1130-1149).
Al-Ẓāfir (1149-1154).
Al-Fā'iz (1154-1160).
Al-'Avoid (1160-1171).
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