British colonialism in Iran meant that by 1925 a ruling family, the Pahlavi Dynasty, had been endorsed by the Crown. The Shah of Iran, Reza Pahlavi, took the Peacock Throne under the 1906 constitution. The Shah modernized Iran and repressed powerful religious leaders/groups. In 1941, the son, Mohammad Reza Pahlavi (age 21) took the throne as the
Shah of Iran, and for the next decade, Iran was at least nominally a constitutional monarchy in the image of Great Britain.
Mohammed Mossadegh then became prime minister, who from the beginning had been opposed to the Pahlavi Dynasty. Mossadegh became a serious threat not only to the Shah but also to the strategic interests of Britain and the US. Winston Churchill (back as British PM in 1951) and the Eisenhower administration launched a non-violent coup in 1953 that returned the Shah to power in Iran; the US role in bringing back the Shah was embedded in the fabric of Iran’s national consciousness. As early as 1953, the US had started to become the “Great Satan” to Iran’s Muslim clerics.
Khomeini was exiled in the Iraqi city of Najaf, a city holy to Shiites. Khomeini kept speaking out against the Shah’s corruption and ties to Israel and the US, and he further developed the idea of an Islamic State, which was revolutionary even by conservative Islamic standards. While Khomeini was in eile and “above” politics, like-minded clerics in Iran started to politically organize, which meant that there was a ready stable of disciples on hand if Khomeini returned.
When Carter was inaugurated on 20 January 1977, there wasn’t a blip on the US radar that indicated that the Shah of Iran was in trouble, but the warning signs were there to be read. As the Cold War intensified, the Shah became the darling of US Presidents due to the vast amounts of oil exported from Iran as well as Iran being a barrier against the USSR in the Middle East. President Carter inherited that relationship and situation concerning Iran from previous Presidents.
Carter believed that the Shah was so isolated that he had no idea what was happening under his nose in his own nation, believing that the opposition to his rule was from very small and insignificant minority. By the Fall of 1978, Zbig had started to realize that he wasn’t getting all of what he needed to know from US intelligence regarding developments in Iran.
In short, the CIA and the US government simply believed the Shah when he said he had everything under control in Iran, but the Shah was indecisive, ill, vain, and isolated, and by the time all that became apparent to Carter, it was too late. The Shah’s failing health played a huge role in his downfall, since nobody in Iran, or even in his family, knew that he had cancer.