In 1840, through the intermediary of Doctor John C. Bennett, the Illinois legislature granted a city charter to Nauvoo. Bennett, a savvy politician, had advised the Saints not to apply for the charter until after the elections of August 1840, so that they could demonstrate their political power to the politicians in Springfield. The Saints had voted en bloc for Whig presidential candidate William Henry Harrison (in retaliation for Democratic President Van Buren's refusal to consider their petitions against the state of Missouri). But the Mormons had cast their vote as a bloc against Whig incumbent Abraham Lincoln in the state legislature, helping to elect instead Democrat James H. Ralston, who had demonstrated friendship toward the Saints. This show of political discipline and strength induced legislators on both sides of the aisle in Springfield to want to get on the Mormons' good side, and facilitated the granting of a very liberal charter with broad powers.

The charter gave the city the right to pass any laws that did not conflict with state laws or the constitution, and granted it the right to establish its own university and its own militia. Though charters granting such broad powers were not unheard of in this time period (Springfield, Quincy and Chicago had similar charters), Joseph Smith and the Mormons interpreted it in such a way as to make Nauvoo a virtual theocratic city state under the control of the prophet. John C. Bennett was baptized into the church, and was elected Nauvoo's mayor and appointed second in command of the Nauvoo Legion.

The Nauvoo period saw tremendous growth for the church, as successful missionary efforts in the east and abroad brought thousands of new converts to Illinois to help build the new Zion. At its height, with a population of 20,000, Nauvoo exercised considerable political clout in the state, and threatened to outstrip Chicago as the biggest city in Illinois. It was also a period of tremendous innovation for Smith, theologically, socially, and politically. It was here that Smith began fully to implement his revolutionary vision of the Kingdom of God on earth. Finally, it was a period of upheaval, as Joseph's Missouri troubles continued to plague him, and as the Saints, reacting to Joseph's radical innovations, again began to fracture between dissenters and loyalists. As in Missouri, the people of Illinois, who had initially welcomed the Saints with open arms, came to fear their growing military and political power. It was the continuing internal conflict and upheaval combined with the growing anxiety of Nauvoo's neighbors that ultimately led to Smith's assassination.

Polygamy. Though Smith had possibly been secretly practicing polygamy himself since as early as 1831, he finally began to formally teach and initiate others into the practice in Nauvoo. His first "official" polygamous marriage took place in April 1841 in Nauvoo, when the prophet married Louisa Beaman. In May 1842, Smith revealed the doctrine of polygamy to the Quorum of the Twelve Apostles, and initiated a number of them, including Brigham Young, into the practice. The Twelve were also authorized to begin solemnizing such marriages at that time. In July 1843, Joseph dictated a formal written revelation on polygamy, which was later read by Hyrum Smith to the Church High Council, and eventually presented to the secret theocratic Council of Fifty (see below) for approval. This revelation unambiguously stated that it would be impossible to achieve the highest level of exaltation in the next world without practicing polygamy, and that all those who rejected the practice would be "destroyed."

Joseph's own practice of polygamy included his marriage to women who were already married to other men, sexual relationships with wives as young as fourteen, and sexual cohabitation with foster daughters. Joseph proposed to girls as young as twelve. Historians have variously counted the number of Smith's polygamous wives as anywhere from twenty (the number officially recorded in the LDS Ancestral File) to fifty (the number counted by Fawn Brodie). Mike Quinn's tally put the number of Joseph's wives at forty-six.

Secret Theocratic Government and the Council of Fifty. Prior to 1842, there had been controversy about Mormon exegesis of Daniel chapters 6 and 7 (the prophecies regarding "the stone cut without hands" and the Kingdom of God on earth). In Kirtland, Joseph had already shown a tendency to blend religious and political authority. Suggestions that Mormons believed in the overthrow of civil government and its replacement by a theocracy came up in the context of Joseph Smith's trial for treason in Missouri. But it was not until April 1842 in Nauvoo that Joseph Smith received a formal revelation on theocratic government. Though the revelation remained secret, in an editorial of July 1842, the prophet publicly unveiled his view that there was no justifiable distinction between ecclesiastical and civil affairs, and that it was the right of the church and his right as prophet "to regulate the affairs of the world."

In March 1844, Joseph secretly appointed the Council of Fifty to manage the government of Nauvoo. The Council's official name was "The Kingdom of God and His Laws with the keys and powers thereof and judgment in the hands of his servants." It was also referred to as "the General Council," "the Council of the Gods," "the Living Constitution," "the Council of the Kingdom," or merely "the Council of Fifty." The Council of Fifty under Smith performed certain functions that would previously have been viewed as functions of the church, such as performing excommunications, and accepting doctrines such as Joseph's revelation on polygamy, but its primary role was to be theocratic and political. While maintaining a facade of democracy, the Council of Fifty became the Saints' defacto government, pre-approving laws before they could be formally passed and pre-approving candidates for public office before they could run. The Council of Fifty continued to play an important political role under Brigham Young and in the early territorial government of Utah.

Danites and the Doctrine of Blood Atonement. In 1842, Joseph began to teach the Doctrine of Blood Atonement. This doctrine included the notion that certain sins could not be forgiven without the shedding of the blood of the sinner. A list of blood-atonement sins as they were understood in Brigham Young's Utah included adultery, apostasy, covenant breaking, counterfeiting, leaving the church, murder, "not being heartily on the Lord's side," profaning the name of the Lord, stealing, telling lies, and inter-racial sex. In Joseph's Nauvoo, it was certainly understood to apply to dissenters and enemies of the church.

In May 1842, an attempt was made on the life of Lilburn Boggs. The shooting of Boggs was quickly linked to Orrin Porter Rockwell. Rockwell had been a devoted friend of the prophet Joseph Smith from the time they were youths, had been one of the first converts to the church in 1830, and was also a former Danite and Joseph's personal bodyguard. There were allegations that Joseph Smith had "prophesied" that Boggs would die a violent death, and that Rockwell had taken it upon himself to "fulfill" the prophesy. But it is possible that Rockwell also took it upon himself to murder the former Missouri governor as a fulfillment of the blood atonement doctrine.

In December 1843, Joseph organized former Danites as his bodyguards, secret police (the "Night Watch") and enforcers in Nauvoo, authorizing them to use terror and lethal force in dealing with dissenters and political enemies. Both William Law and William Marks, opponents of polygamy, feared that they had been marked by the Danites for assassination because of their open criticism of Smith.

The Nauvoo Legion. Joseph was determined that the Saints should never again be at the mercy of their enemies as they had been in Missouri, which is why he made sure that the Nauvoo charters included provisions for a military force. But as Nauvoo grew in numbers, political clout and ambition, the Mormons' neighbors in Illinois began to fear that the legion was more than just a defense force. In 1842, the Nauvoo Legion, of which Joseph himself was commander-in-chief, had 2,000 soldiers, the largest single militia in the state of Illinois. By the following year, the number of troops in the legion had risen to nearly 3,000, at a time when the standing army of the entire United States of America was not more than 8,500. By the time of Joseph's death in 1844, the Legion numbered about 5,000.

In March 1844, Smith petitioned Congress to grant him the power to raise a frontier military force of 100,000 armed volunteers.

Geopolitical Ambitions. In March 1844, in anticipation of the establishment of a Mormon empire in the northwest, Joseph Smith sent ambassadors to Washington, D.C., England, France, Russia and the Republic of Texas, in order to ascertain the level of support they might offer for the establishment of a western Mormon Empire. (At this time, Oregon, California and Texas had not yet been annexed by the United States, and control over the Oregon Territory was still disputed by Britain, France, the U.S. and Russia.) Smith simultaneously sent scouts to the Oregon Territory, California and Texas with the purpose of identifying ideal sites for settlements to be established in those regions.

Other theologico-political innovations of the period included Smith's elaboration of a tritheistic explanation of the Godhead (the doctrine that Father, Son, and Holy Ghost are three distinct and separate beings); his creation of the Mormon temple ceremonies based on revisions of Masonic ritual and his innovative reinterpretation of the creation narratives in Genesis and of the story of Adam and Eve; the doctrine of Eternal Marriage, in connection with the evolving doctrine and practice of polygamy; and the "Second Anointing" ceremony, along with the appointment of the shadowy Quorum of the Anointed, which took on quasi-ecclesiastical and quasi-theocratic roles. All of these developments stemmed from Joseph's evolving views of divinity, in which the goal of mortal life was conceived as the attainment of godhood. Construction on the Nauvoo Temple began in 1841, though it was not completed until after the prophet's death. In 1842, the prophet published the Pearl of Great Price which included the Book of Moses and the Book of Abraham.

Theocratic Kingship. In 1842, the prophet drafted a proclamation "from Joseph Smith, President of the Church of Jesus Christ of Latter-day Saints, the Prophet, Seer and Revelator of the Most High God, to the President of the United States of North America--the Governors of the several states--the Emperors, Kings, and Princes of the earth--the Executives of all nations--the Chiefs of all tribes--and all occupying high places in the administration of governments." In this letter, he called upon the rulers of the world "to yield yourselves as obedient subjects to the requirements of heaven," demanding that they repent, join the Church of Jesus Christ, and assist him in the building up of Zion.

Smith's conviction of his right as God's prophet to manage worldly affairs, and to have the rulers of nations be subject to him was given concrete expression on April 11, 1844, in a secret ceremony conducted by the Council of Fifty, in which Joseph was ordained and crowned theocratic "king on earth."

In January 1844, Joseph Smith initiated his candidacy for the presidency of the United States, and began sending missionaries throughout the United States to campaign on his behalf. Although Smith's candidacy was presented to the public as a campaign for religious freedom and equality, it appears that the prophet also privately saw his bid for the presidency in light of his theocratic "right" as God's emissary to rule the world. As Willard Richards put it in a letter to the prophet, "You are already president pro tem of the world."

Smith recognized what an explosive impact it would have if any of his theological, social, and political innovations became widely known, so efforts were made to keep his theocratic ambitions and the practice of polygamy an absolute secret. Secrecy, however, proved impossible as many of the Saints themselves, revolted by what they learned of his practices and ambitions, began to fragment internally, and threatened to defect and expose what they knew to the outside world.