To begin, the Oxford Dictionary of Islam provides a summary of the Iqta. It denotes it as a "system for paying off political debts during the Abbasid Caliphate that involved tax collection and has been compared to the European Fief". It further goes on to discuss its further use by the Buwayhids, Seljuks, Ayyubids, Mamluks, and the Ottomans. From here we can get a basic understanding of how the system works, and it's similarities to Feudalism and Fiefs.

Through the work of Amar S. Baadj we can gain a further understanding of the Iqta. The Iqta was a grant from the state (the Caliph) to Individuals providing the individuals with the right to receive partial or all revenue from a plot of land. Furthermore, there are two types of Iqta that are noted, that of the Tamlik which consists of land privately held in return for the grantee paying certain taxes to the state, and that of the Istighlal which consists of revenue from a plot of land being provided in lieu of salary (normally used to pay soldiers). So to summarize, the Iqta was a system in which revenue from plots of land were granted to an individual by the state.

The main difference between the Iqta and Feudalism stems from three main factors. These are the (general) lack of hereditary succession, the (general) lack of power over the peasants who worked the plot of land, and the (general) lack of supervision by the grantee. Within Feudalism/the Fief system, knights and nobles who were granted land were given direct ownership of the land and those who worked it, as well as the ability for the land to be passed down to their descendants. Furthermore, the Feudal system was developed by the Merovingians and Carolingians for the purpose of rewarding warriors and soldiers for their work on military campaigns, and would often see land provided by both the Lay kings as well as the Ecclesiastical clergy. These are all points in which the Iqta system differs from the Feudal system.

It is important to note that all of these differences are generally true, though depending on circumstances such as the time period, and the context in which the grant was provided, all of these could fall in line to create an Iqta far more similar to the Fief system. One such system which would be similar to that of the Feudal system (and possibly why the term Iqta was chosen to represent the Islamic system of governance in CK2 and later EU4) is that of the Ayyubid's Iqta system. In it, the vast majority of the Ayyubid military was paid through the use of the Istighlal Iqta rather then salaries, and these grants allowed the grantee to directly supervise and administer the land. In addition, these grantees often lived on their land as to better supervise it, and the granted land was inherited by the descendants of the grantee. As such, the Ayyubid Iqta system shows great similarity to that of the European Feudal system, though this was not always the case.

Overall, the Iqta system was one in which land was granted to an individual for the purposes of collecting revenue, and this looser purpose is what differentiates it from the more strictly defined Feudal system, though exceptions did occur all throughout the Islamic world.

Sources used:

Wim Blockmans and Peter Hoppenbrouwers, Introduction to Medieval Europe, 300-1500, 3rd edn (New York: Routledge, 2018).

Amar S. Baadj (2020), Evidence for the Ayyūbid Iqṭāʿ in Ifrīqiyya and a Reconsideration of the Almohad Iqṭāʿ, Al-Masāq, 32:2, 169-184

"Iqta." In The Oxford Dictionary of Islam, edited by Esposito, John L.: Oxford University Press, 2003.