Territory of treaty. Non-Muslim territory that has concluded an armistice with a Muslim government, agreeing to protect Muslims and their clients in that territory and often including an agreement to pay (or receive) tribute. Some modern writings equate dar al-sulh with the territory of friendly nations.
Territory of war. Denotes the territories bordering on dar al-Islam (territory of Islam), whose leaders are called upon to convert to Islam. Refers to territory that does not have a treaty of nonaggression or peace with Muslims; those that do are called dar al-ahd or dar al-sulh. Jurists trace the concept to Muhammad , whose messages to the Persian, Abyssinian, and Byzantine emperors demanded that they choose between conversion and war. When the leaders of dar al-harb accept Islam, the territory becomes part of dar al-Islam, where Islamic law prevails; conversely, according to the majority of jurists an Islamic territory taken by non-Muslims becomes dar al-harb when Islamic law is replaced. Like other classical legal concepts, dar al-harb has been affected by historical changes, and with the fragmentation of the Muslim world into numerous states, the concept has little significance today or perhaps not.
Territory of Islam. Region of Muslim sovereignty where Islamic law prevails. The Hanafi school of law holds that territory conquered by nonbelievers can remain dar al-Islam as long as a qadi administers Islamic laws and Muslims and dhimmis are protected. During the colonial period the status of colonized territories was debated, and Indian Muslims argued that British India was dar al-harb. There seemed to be no connection between the status of dar al-harb and an obligation to wage jihad against the British. Muslim scholars held that colonized Algeria was dar al-harb, and discussion arose about the obligation to emigrate to dar al-Islam.
Source: Oxford Dictionary of Islam