When the Sunni extremists running amok in Iraq announced that their name has been shortened from the Islamic State in Iraq and al-Sham (ISIS) and decreed that all of the world's Muslims must pledge allegiance to their leader, they did more than just formally declare a new caliphate.
Here's a look at what went down - and what it all means.
WHAT JUST HAPPENED?
The group formerly known as ISIS now wants to be known as the Islamic State - and the only show in town.
The move could be characterized as yet another corporate rebranding. In 2007, they changed their name to the "Islamic State of Iraq" and later added on "and al-Sham." However, analysts warn that widespread use of the new moniker could be dangerous in and of itself.
"It should be seen for what it is - an exercise in propaganda, image manipulation and trying to lock in the gains of the past month in terms of their brand," said Shashank Joshi, a research fellow at the London-based Royal United Services Institute think tank.
WHAT IS A CALIPHATE?
There have been several attempts to resurrect the caliphate - which at one point ruled over the Middle East, much of North Africa and beyond - over the course of Islam's 1,400-year history.
The last widely recognized caliphate was abolished by Turkey in 1924, and the idea of recreating the Islamic Caliphate has been a goal of Muslim extremists - including al Qaeda - for decades.
While Osama bin Laden launched the 9/11 attacks and helped the Taliban take over Afghanistan, he never controlled a vast territory in the heart of the Middle East like ISIS now does or came close to realizing his dream of establishing a caliphate.
ISIS, too, adopted the re-establishment of a caliphate - or Islamic State, governed by Shariah law - as its mission.
Sunday's announcement that ISIS' mission has effectively been accomplished signals that the group has believes it has enough momentum, support and religious legitimacy to succeed and govern a real state under Islamic law.
While ISIS may be able to hold ground in northern Iraq, "this caliphate is a bit of a pipe dream," according to Joshi.
He added: "The idea of an Islamic state conjures up the idea of a bureaucracy and political leadership. What they don't have is a functioning state, let alone a caliphate - which is an Islamic empire, essentially."
...AND WHAT MAKES THIS ONE DIFFERENT?
Re-establishing the caliphate has "very big ideological and theological implications," according to Charlie Cooper, a researcher at the Quilliam Foundation.
Doing so demonstrates that ISIS has morphed from a movement into a political entity, thanks to its ability to draw in funding and fighters from around the world.
Bolstered by gains and experience fighting in Syria and Iraq, the group's scope has formally widened with the removal of the reference in its name to al-Sham - the vast region including Syria, Jordan, Lebanon and Palestine.
Several maps have been bandied about appearing to portray the group's plans for expansion and wipe out borders from the Mediterranean to the Gulf.
The maps suggest wide-reaching aspirations to control the historic Islamic world, areas which were Muslim during Islam's golden age - from modern-day Spain stretching across the Maghreb from Mauritania over to Egypt and even Saudi Arabia and parts of India.
"The borders in the Middle East are artificial. They were lines in the sand and they didn't correspond to anything in particular other than the perceived interest of people who drew them," said Anthony Glees, director of the Centre for Security and Intelligence Studies at Britain's University of Buckingham.
But redrawing those lines has much greater implications when the cartographer is a terror organization.
"It could potentially destabilize the whole of the Middle East," said Glees. "It's like if you take one piece out of a jigsaw puzzle - the whole puzzle becomes useless. One thing will lead to another."
BUT ISNT THIS WHAT AL QAEDA WANTS, TOO?
The establishment of the caliphate has been al Qaeda's end goal since the group's inception, "but it's something they never tried to do because they didn't have the legitimacy or didn't have the hubris," according to Cooper.
The significance of declaring the caliphate, will not be lost on al Qaeda's leader, Ayman al-Zawahiri.
"Al Qaeda has become increasingly irrelevant in the face of ISIS skyrocketing to the position it's in now," Cooper said. "Zawahiri will be spinning in his cave over this."
ISIS' violent explosion on the international jihadi scene and consolidation of territory has made it an attractive bet to those who fund or seek to join the cause. Foreign fighters are flowing in to take up arms.
"ISIS looks more exciting, it looks inspiring," Joshi said. "These possibilities are invigorating and electrifying for jihadists."
That puts al Qaeda's bread and butter - the success of its affiliates - in jeopardy.
"This is a gauntlet thrown down at Al Qaeda," Joshi said. "Zawahiri will be worried that these affiliates may defect because ISIS is the center of world jihadist activity."
Analysts warn that Zawahiri could try to tarnish ISIS' reputation through propaganda, or be pushed to have affiliates prove their capabilities and relevance.
"This competitive element in jihadist circles means there are added incentives to conduct attacks on the West," Joshi said.
Another move would be trying to bring ISIS back into the fold - a less likely option, to many, given Zawahiri's deep-seated problems with the newest so-called caliphate's leader.
SO THAT MAKES THE CALIPH…..
That man is Abu Bakr al-Baghdadi, a militant with a $10 million bounty on his head who in 2010 took over the then-called Islamic State of Iraq.
His broader ambitions of establishing an Islamic caliphate were solidified when he changed the group's name in April 2013 to the Islamic State of Iraq and the Levant -- which is also known as ISIS.
Jihadist propaganda has painted him as an imam from a religious family descended from noble tribes, and a scholar and a poet with a Ph.D. from Baghdad's Islamic University, possibly in Arabic.
Baghdadi also has claimed to be a direct descendant of the Prophet Muhammad - a point underscored in Sunday's declaration that he is the caliph.
That means he's "effectively appointed himself as the leader of Muslims the world over and the successor of the Prophet Muhammad and a divinely appointed leader of Muslims," Cooper said, calling the move "quite controversial."
Baghdadi is essentially saying his ideology is the true Islam and anyone not following is a non-believer, according to Cooper.
"As a very extremist jihadist, to say you're the ruler of all Muslims? It's going to outrage Muslims the world over," Cooper added. "This is a man who does not represent Islam."
To an outsider, the ideological differences between ISIS and al Qaeda might seem minor. But analysts say the two are clearly at odds with each other.
ISIS "is much happier to declare someone an apostate and kill them than Al Qaeda," Cooper said. "The interpretation of Islam that Baghdadi has is a lot harsher and a lot more rejectionist and a lot more exclusive than al Qaeda's."
Baghdadi previously tried to merge with Syria's Jabhat al-Nusra - a move which ultimately failed and let to al Qaeda's disavowal of ISIS earlier this year in a statement severing all ties with the group.
"Al Qaeda declares that it has no links to the ISIS group," Zawahri said in a posting on jihadist websites. "We weren't informed about its creation, nor counseled. Nor were we satisfied with it; rather we ordered it to stop. ISIS isn't a branch of al Qaeda and we have no organizational relationship with it. Nor is al Qaeda responsible for its actions and behavior."
Getting cast out by al Qaeda has not necessarily hurt Baghdadi - or his endgame.
"Baghdadi is charismatic, especially compared to Zawahiri, who is kind of anonymous and doesn't have much charisma," Joshi said. "Also he's a fighter, he's a warrior, he's carved out the state whereas Zawahiri is seen as someone who is on the run."
Analysts say that while an affront to al Qaeda could provoke a high-profile attack aimed at restoring the group's credibility and status as champion against the West, equally dangerous will be if Baghdadi sees that attacks against the West are necessary in order for his group to attain the mantle of standard bearer of global jihad.
Whether or not the declaration of a caliphate is propaganda-driven, it is expected to have a knock-on effect in the circles of international jihad.
On the one hand, it could have a bandwagon effect - with jihadists rushing to join the biggest name in town - or just as easily alienate others who see it as a grab for power.
But the group's statement warning other jihadi factions not to resist may set the stage for a showdown.
"It is incumbent upon all Muslims to pledge allegiance," the group's spokesman Abu Muhammad al-Adnani said. "The legality of all emirates, groups, states, and organizations, becomes null by the expansion of the caliph's authority and arrival of its troops to their areas."
That means jihadis have been given a clear choice - join forces or a coalition of resistance, according to Joshi.
WILL THE CALIPHATE LAST?
ISIS in Syria has developed an "increasingly efficient model of governance, capable of simultaneously implementing harsh medieval justice and a whole range of modern social services," according to Charles Lister, a visiting fellow at the Brookings Doha Center.
But analysts warn that the so-called Islamic State will have difficulty growing, governing and maintaining a caliphate on an even larger scale.
While ISIS' gains in Iraq have been impressive, analysts expect the group to run into much greater resistance as they push south.
Plus, their tactics could alienate communities in the very areas where they currently enjoy a measure of support.
They could alienate local Sunnis with the imposition of Shariah law and struggle to make areas under their control economically viable.
An Islamic state can't just be an insurgent-held territory, Joshi said.
"It has to be more than that - it has to be governed, it has to be administered," Joshi said. "They haven't proved their ability to do this."
WHAT HAPPENS NOW?
Analysts say the response will play out on two fronts: many Muslims will vehemently reject the declaration while others will be impressed by ISIS' rapid ascent and get taken in.
Already, crowds are cheering in Syria for Baghdadi as caliph, while Iraq's leaders are warning the threat is now a global one.
While ISIS has made rapid gains, what happens in the coming days could cement whether the group fizzles out as a one-hit wonder or global jihadist threat.
"The situation is so fluid right now," Cooper said. "It if takes many strategic hits or if it loses a lot of ground, that could change the perception for jihadists."
WHAT DOES THIS MEAN FOR THE WEST?
While ISIS has not directly issued fatwas against Americans in the way Osama bin Laden did, analysts say it would be foolish to maintain distance from the crisis.
The so-called Islamic State has focused on gaining and securing territory to fortify its positions in the region - but analysts say once it gets to a place where it feels particularly secure, it would not be surprising for the group's gaze to shift to international ambitions.
But international intervention "will only serve to feed the narrative of Baghdadi," warned Cooper.
Still, ISIS has morphed into "the very thing" that scared the West enough to intervene in Iraq in 2003: "a state dedicated to Sunni extremism and terrorism and built on that," according to Glees. "Once maps are being redrawn you get global instability. It's clearly an effective armed force and its pulling in jihadists from all over Europe.
He added: "We have to err on the side of caution and assume that Mr. Abu Bakr al-Baghdadi is our mortal enemy - and act accordingly."