And hold fast, all of you together, to the Rope of Allah and be not divided among yourselves
(Qur'an 3:103)

The term "Shi'ah" is an adjective used by Muslims who follow the Imams from the Family of the Prophet (Ahl al-Bayt).  They use it not for reasons of sectarianism or for causing divisions amongst Muslims.  They use it because the Qur'an uses it, the Prophet Muhammad used it, and the early Muslims used it - before words such as Sunni or Salafi ever came into existence.

Shi'ah in the Qur'an

The word "Shi'ah" means "followers; members of a party". Allah has mentioned in the Qur'an that some of His righteous servants were Shi'ah of His other righteous servants.

And most surely Abraham was among the Shi'ah of him
(Qur'an 37:83)

And he (Moses) went into the city at a time when people (of the city) were not watching, so he found therein two men fighting, one being of his Shi'ah and the other being his enemy, and the one who was of his Shi'ah cried out to him for help against the one who was of his enemy
(Qur'an 28:15)

Thus Shi'ah is an official word used by Allah in His Qur'an for His high rank Prophets as well as their followers.

If one is a Shi'ah (follower) of the most righteous servants, then there is nothing wrong with being Shi'ah. On the other hand, if one becomes the Shi'ah of a tyrant or a wrong-doer, he shall meet with the fate of his leader. The Qur'an indicates that on the Day of Judgment people will come in groups, and each group would have its leader (Imam) in front of it. Allah says:

(Remember) the day when we will call every people with their Imam
(Qur'an 17:71)

On the Day of Judgment, the destiny of the "followers" of each group depends on the destiny of their Imam (provided that they really followed that Imam).  Allah mentioned in the Qur'an that there are two types of Imams:

And We made them Imams who call to the fire, and on the Day of Resurrection they shall not be assisted. And We caused a curse to follow them in this world, and on the Day of Resurrection they shall be of those made to appear hideous
(Qur'an 28:41-42)

The Qur'an also reminds that there are Imams who are appointed by Allah as Guides for the mankind:

And We made of them Imams to guide by Our command when they were patient, and they were certain of Our communications
(Qur'an 32:24)

Certainly, the true followers (Shi'ah) of these Imams will be the real prosperous people on the Day of Resurrection.

Shi'ah in the Hadith

In the history of Islam, "Shi'ah" has been especially used for the followers of Imam 'Ali (a). This phrase is not something invented later! The first individual who used this term was the Messenger of Allah himself.   When the following verse of the Qur'an was revealed:

(As for) those who believe and do good, surely they are the best of creatures
(Qur'an 98:7)

The Prophet (s) said to Ali: "It is for you and your Shi'ah."

He further said: "I swear by the one who controls my life that this man (Ali) and his Shi'ah shall secure deliverance on the Day of Resurrection."

• Jalal al-Din al-Suyuti, Tafsir al-Durr al-Manthur, (Cairo) vol. 6, p. 379
• Ibn Jarir al-Tabari, Tafsir Jami' al-Bayan, (Cairo) vol. 33, p. 146
• Ibn Asakir, Ta'rikh Dimashq, vol. 42, p. 333, p. 371
• Ibn Hajar al-Haythami, al-Sawa'iq al-Muhriqah, (Cairo) Ch. 11, section 1, pp 246-247

The Prophet (s) said: "O Ali! (On the day of Judgment) you and your Shi'ah will come toward Allah well-pleased and well-pleasing, and there will come to Him your enemies angry and stiff-necked (i.e., their head forced up).

• Ibn al-'Athir, al-Nihaya fi gharib al-hadith, (Beirut, 1399), vol. 4 p. 106
• al-Tabarani, Mu'jam al-Kabir, vol 1 p 319
• al-Haythami, Majma' al-Zawa'id, vol. 9, number 14168

The Prophet (s) said : "Glad tiding O Ali! Verily you and your Shi'ah will be in Paradise."

• Ahmad Ibn Hanbal, Fadha'il al-Sahaba, (Beirut) vol. 2, p. 655
• Abu Nu'aym al-Isbahani, Hilyatul Awliya, vol. 4, p. 329
• al-Khatib al-Baghdadi , Tarikh Baghdad, (Beirut) vol. 12, p. 289
• al-Tabarani, Mu'jam al-Kabir, vol. 1, p. 319
• al-Haythami, Majma' al-Zawa'id, vol. 10, pp. 21-22
• Ibn 'Asakir, Ta'rikh Dimashq, vol. 42, pp. 331-332
• Ibn Hajar al-Haythami, al-Sawa'iq al-Muhriqah, (Cairo) Ch. 11, section 1, p. 247

But how could the Prophet (s) use such a divisive term?

Was Prophet Abraham a sectarian? How about Prophet Noah and Prophet Moses?  If Shi'ah was a divisive or sectarian term, neither Allah would use it for His high rank Prophets nor would Prophet Muhammad (s) have praised them.

It should be emphasized that the Prophet (s) never wished to divide Muslims into groups. He ordered all people to follow Imam Ali (a) as his agent during his life time, and as his Successor and Caliph after him.  Unfortunately those who heeded the Prophet's wish were few and were known as "Shi'ah of Ali". They were subjected to all types of discrimination and persecution, and suffered from the day that the Mercy to Mankind, Prophet Muhammad (s), passed away. If all the Muslims had obeyed what the Prophet wished, then there wouldn't exist any group or school within Islam.  In a tradition, the Prophet (s) said:

"Shortly after me discord and hatred will arise among you, when such a situation arises, go and search out Ali because he can separate the Truth from falsehood"

• Ali Muttaqi al-Hindi, Kanz al-'Ummal, (Multan) vol. 2 p. 612, number 32964

Regarding the Qur'anic verse quoted earlier, some Sunni scholars narrated from Imam Ja'far al-Sadiq (a), the sixth Shi'ah Imam from the Family of the Prophet (Ahl al-Bayt), that:

"We are the Rope of Allah about whom Allah has said: And hold fast, all of you together, to the Rope of Allah and be not divided among yourselves"

• al-Tha'labi, Tafsir al-Kabir, under commentary of verse 3:103
• Ibn Hajar al-Haythami, al-Sawa'iq al-Muhriqah, (Cairo) Ch. 11, section 1, p. 233

Thus, if Allah denounces sectarianism, He denounces those who separated from His Rope, and not those who hold fast to it!

Conclusion:

We have shown that the term Shi'ah has been used in Qur'an for the followers of the great servants of Allah, and in the traditions of the Prophet for the followers of Imam Ali (a). One who follows such a divinely appointed Guide is safe from the disputes in the religion and has grasped the Strong Rope of Allah, and has been given the glad tidings of Paradise.