What was life like in the Ottoman empire?

Islam separated the world and its inhabitants into two zones: the world of Islam and the world of non-Muslim heretics.

Distinctions of ethnic nationality were not important. The lives of the mass of population under the Ottoman system were tightly controlled, defined and divided according to three other criteria:

The most important was the division of the population by religion into "millets". People interacted with the state through the leaders of their own millet, through a hierarchy leading up from local representatives to greater ones. Muslims were responsible to the "ulema" for taxes and legal matters. Only members of the Muslim millet could bear arms (including the forcibly converted janissaries) and were exempt from some taxes. Balkan Orthodox Christians (Greeks and Slavs combined at first) were under the authority of the Patriarch of Constantinople. In case of confict, Islamic law and state practice took precedence but otherwise the laws and institutions of the Orthodox millet remained in force largely unchanged from local customs before the conquest. Because so much administrative, fiscal and legal business took place through the millet, the Orthodox church acted as a "state within a state." Jews were administered through the chief rabbi in Istanbul, both the Sephardic Jews who came to the Eastern Mediterranean from Spain and the Ashkenazi Jews who were expelled from Central Europe. Finally, various small Christian minorities like the Armenians were part of a hierarchy under the Gregorian archbishop of Bursa.

Place of residence also affected the rights of the common people. Peasants could not leave their land and move into cities, because the Turks feared that the countryside would be depopulated. City life was attractive because urban dwellers were exempt from certain taxes and labor dues and from auxiliary military duties (service as wagon-drivers, for example).

Peasants paid taxes in kind: about a tenth of their produce went to their timariot landlord. Much of the rest of their crop was purchased by the state at a low price to feed the urban poor. Villages were liable for some duties as a community, including a small cash rent for use of the sultan's land and had to contribute labor to work the timariot's estate (Western European peasants were liable for similar but larger burdens at this time). Mountain areas unsuited for agriculture were granted to nomadic tribes who paid taxes in kind: butter, yogurt, oil, cheese and other foods needed to feed the cities or the army.

In the cities, subjects were grouped according to their occupations. Craftsmen were members of guilds, which often had monopoly control of production, for example of salt or candles. Guilds regulated their own industries and taxed themselves to raise money for social welfare functions for their members. Guild representatives sat as a city council to advise the "kadi" or mayor. Fire departments, hospitals and other city services were supported by tax-exempt endowed foundations (vakf).

This was the idealized Ottoman system.

Here's a good summary of the Ottoman rule from a ruling perspective by the Ottomanist American academic and Ottoman Historian Donald Quataert:

"A far more positive reason to study the Ottoman empire and assign it an important place in world history concerns the tolerant model of administration that it offered during most of its existence. For a contemporary world in which transportation and communication technologies and the migrations of peoples have brought about an unparalleled confrontation with difference, the Ottoman case warrants careful study.

For centuries the Ottoman hand rested lightly on its subject populations. The Ottoman political system required its administrators and military6 The Ottoman Empire, 1700-1922 officers to protect subjects in the exercise of their religion, whether Islam, Judaism, or Christianity in whatever variation - e.g. Sunni, Shii, Greek or Armenian or Syriac Orthodox or Catholic. This requirement was based on the Islamic principle of toleration of the "People of the Book," meaning Jews and Christians. These "people" had received God's revelation, even if incompletely and imperfectly; therefore, the Ottoman Islamic state had the responsibility to protect them in the exercise of their religions.

Without question, these legal protections did fail. Christian and Jewish subjects sometimes were persecuted or killed because they did not share the Islamic faith of the state apparatus. But such actions were violations of the bedrock principle of toleration - a high standard to which the state expected and required adherence.

Such principles of toleration governed inter-communal relations in the Ottoman empire for centuries. But, in the final years, there was mounting disharmony and inter-communal strife. For most of its history, however, the Ottoman Empire offered an effective model of a multi-religious political system to the rest of the world..."(The Ottoman Empire 1700-1922)