Canonization, in the Orthodox Church, is different from sainthood in the Catholic Church. The canon is a list; a standard. To be canonized is to have your name placed in the canon of those so honored. Each canonized individual is assigned a day, on the Church calendar, when they, along with others, will be acknowledged by the faithful.
The decision to place a person's name in the canon is, in modern times, decided by the Church. The primary characteristic that must have been present in the life of the individual being considered is that he/she held within him/herself the likeness of God. God created mankind in His image. Image, in Greek, is ikon. Man is to be a faithful reflection of God, the original ikon. When the image of God is seen in a person, their life is considered one which the children of God (the people) should emulate. As a result, Orthodox churches feature several ikons (images) of saints.
During the first millennium after Christ, and before the Great Schism, saints were identified and acknowledged without any official rite. The tradition began as individual parishes, or groups of believers, remembered the most pious lives of their departed members and strove to develope their spiritual qualities in their own lives. The faithful would pray to the deceased for guidance and cherished their relics (human remains) in the belief that the Holy Spirit still abided there.
By the 900s AD, the Church rulers in Rome mandated that saints be officially listed. The first individual listed in the canon was Ulrich of Augsburg, canonized in 993 by Pope John XV. In 1054, the Great Schism occurred, dividing the Church between East (Constantinople) and West (Rome). The Church of Rome (Catholic) soon developed a rigid, legal style process for identifying saints. The East, to this day, has not created such a system.
The tradition of localized determination of saints continued. Often, these individuals were acknowledged as such; as spiritual examples; during their lifetimes. They were, then, honored (venerated) after their passing.
In the Orthodox tradition, saint means holy. Canonization does not make one a saint. In other words, the act of including a person in the canon does not make them holy. They are canonized because they were holy in their mortal life. The life of a holy person is placed before the faithful as an example to follow.
There often is confusion and misunderstanding regarding the Orthodox practice of praying to saints and venerating their ikons. Orthodox Christians do NOT replace God with saints. Prayers to a saint are for help and guidance. One will pray, asking a saint to pray for them. This is no different that when one asks a friend of fellow Christian to pray for them or for a particular concern. Saints, being holy, are persons whose lives are dedicated to the need and importance of prayer. Asking a saint to pray for, or better said, with you is like seeking the help and wisdom of a more experienced person.
Veneration of ikons is often misunderstood as worshiping the image. This is not the case. When the Orthodox Christian bows and kisses the ikon, he/she is honoring the image of God that is seen in the saint's life. The believer prays that God's image will be visible in his/her life as well.
The practice of an Orthodox priest censing and bowing to an ikon is familiar. The ancient Hebrews of the Old Testament used incense to signify their prayers rising up to God who they hoped would find them pleasing. What many do not realize is, the priest, also, censes and bows to the faithful gathered. The priest sees the image of God in the ikon, as well as in each individual of his congregation.
In conclusion, canonization does not make a person holy (a saint). The person was holy in life, reflecting the image of God in their spiritual walk. Canonization merely acknowledges what already is and establishes the person's spiritual life as one to be emulated.
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