Ottoman rulers (generally known as Sultans in the West) were known primarily by the title of Padishah and used the title of Caliph only sporadically. Mehmed II and his grandson Selim I used it to organized Islamic countries. As the Ottoman Empire grew in size and strength, Ottoman rulers beginning with Selim I began to claim Caliphat authority.
Ottoman rulers used the title "Caliph" symbolically on many occasions but it was strengthened when the Ottoman Empire defeated the Mamluk Sultanate in 1517 and took control of most Arab lands. The last Abbasid Caliph at Cairo, al-Mutawakkil III, was taken into custody and was transported to Constantinople, where he reportedly surrendered the Caliphate to Selim I. The first time the title of "Caliph" was used as a political instead of symbolic religious title by the Ottomans was the peace treaty with Russia in 1774.
The outcome of this war was disastrous for the Ottomans. Large territories, including those with large moslem populations, such as Crimea, were lost to the Russian Empire. However, the Ottomans under Abdul Hamid I claimed a diplomatic victory by assigning themselves as protectors of moslems in Russia as part of the peace treaty.
This was the first time the Ottoman caliph was acknowledged as having political significance outside of Ottoman borders by a European power. As a consequence of this diplomatic victory, as the Ottoman borders were shrinking, the powers of the Ottoman caliph increased.
Around 1880 Sultan Abdul Hamid II reasserted the title as a way of countering Russian expansion into moslem lands. His claim was most fervently accepted by the moslems of British India. By the eve of the First World War, the Ottoman state, despite its weakness relative to Europe, represented the largest and most powerful independent Islamic political entity. The sultan also enjoyed some authority beyond the borders of his shrinking empire as caliph of moslems in Egypt, India and Central Asia.
In the 1920s, the Khilafat Movement, a movement to defend the Ottoman Caliphate, spread throughout the British colonial territories in what is now Pakistan. It was particularly strong in British India, where it formed a rallying point for some Indian moslems as one of many anti-British Indian political movements. Its leaders included Maulana Mohammad Ali, his brother Shawkat Ali, and Abul Kalam Azad, Mukhtar Ahmed Ansari, and Muhammad Jan Abbasi.
On March 3, 1924, the first President of the Turkish Republic, Mustafa Kemal Atatürk, as part of his reforms, constitutionally abolished the institution of the Caliphate. Its powers within Turkey were transferred to the Grand National Assembly of Turkey, the parliament of the newly formed Turkish Republic.
Reference: Wikipedia English, 17 February 2011