This study explores the role of religious assemblies (Hey’ats) in realizing Islamic governance through public participation, using Grounded Theory methodology. Findings reveal that religious assemblies, as institutionalized social capital, leverage Shia teachings and decentralized civic networks to address gaps in formal governance. These entities operate through three core mechanisms: Discourse Production (promoting concepts like resistance and justice in religious rituals), Public Networking (forming grassroots groups to resolve local issues), Crisis Management (collaborating during emergencies such as floods or pandemics). The proposed “Assembly-Centered Governance Model” demonstrates how Hey’ats reduce governance costs and enhance regime legitimacy by merging tradition, technology, and voluntary participation. Unlike Western governance models, this framework derives legitimacy not from hierarchical structures but from public trust in civic institutions. The study recommends strategic measures, including policy frameworks, targeted financial support, and legal reforms, to systematically integrate Hey’ats into Iran’s governance architecture during the Second Phase of the Revolution. It also emphasizes transforming Hey’ats into “socio-cultural hubs” and leveraging their potential in Iran’s public diplomacy. By bridging the gap between state and society, Hey’ats exemplify an indigenous model of Islamic governance that prioritizes communal ethics and adaptive problem-solving.