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Shi'i Islam
Even in Shi'i Islam, there are variations, but these all give the Mahdi an elevated and unique position. In Shi'i Islam, the Mahdi is central to the creed, contrary to Sunni Islam.
In the now extinct sect of Kaisaniya, founded around the 7th century Muhammad bni l-Hanafiya, son of Ali with another wife than Fatima. After Husein's death at Karbala in 680, Muhammad was defined as "Mahdi". Muhammad appears to have refused any special status, but the Kaisaniya sect would developed independent. They defined a theology where his return from his grave in Mount Radwa was expected, believing that he was still alive, and not dead.
A certain Mukhtar challenged the stand of the Kaisaniya, and declared Husein to be the awaited Mahdi instead. The sect adhering to this was called Mukhtariya.
Sunni Islam
There are more than one way of defining the Mahdi in Sunni Islam, but never is it given such an importance as we can see it in Shi'i Islam. He is generally a restorer, the one who will secure a system where Muslims can live according to the principles of Islam.
"Mahdi" has been used as an honorific title for several prominent figures in Islam. This applies to Ali, the 4th caliph; his son Hassan; as well as the Ummayad caliph Umar 2. In the latter case, theologians meant that Umar 2 was the 1st of altogether 8 renewers of Islam. The last of these 8 would be a figure simply called Mahdi or Isa (not to be confused with the historical Jesus).
When "Mahdi" was used for the Abbasid Caliph an-Nasir, he was defined as the final Mahdi, and there were no need to expect any future Mahdis.
"Mahdi" has sometimes been used for converts to Islam, because these people are believed to have been guided by God to find the truth.
"Mahdi" has been frequently used for military leaders, both when defining a future leader who would come and free suppressed Muslims, as well as leaders that appeared in flesh and blood. Among the most known are El Mahdi of 19th century Sudan, and Ibn Tumart of 12th century Morocco.