Mullah and its variation mulla have also degenerated into a derogatory term for a Muslim priest that connotes a semiliterate, backward, often bigoted village imam.n Iran, Shia clerics commonly use Ayatollah, rather than Mullah. Until the early 20th century, the term mullah was used in persian seminaries to refer to low-level clergy who specialized in telling stories of Ashura, rather than teaching or issuing fatwas.