The Quran has used the term in its broad sense as well...

The Quran has used the term in its broad sense as well: “All of those who are in the heavens and the earth or all of the creatures in the heavens and the earth are Muslims and have (willingly or unwillingly) submitted to Allah’s generative (takwini) or legislative (tashri’i) will.” As for the Islam of people towards Allah, it means for them to be satisfied with their destinies that Allah (SWT) has determined for them, both the destinies that have to do with what happens to the individual in this world and the ones related to Islamic rulings and the dos and don’ts.

In normal usage though, “Islam” denotes the religion that brought to the people. The tie between the two meanings is that this religion is all about surrendering to Allah (SWT) and adhering to His decrees and the laws He has legislated without question.

In the Qur’an, not only those who were among the companions of are considered Muslims, but rather all people throughout history who have surrendered and submitted to Allah and rejected paganism are Muslims and this is why the Qur’an introduces Prophet Abraham as a Muslim even though he lived before (PBUHH).

When Allah addresses the Prophet saying: “Say:” I have been commanded to be the first who (becomes Muslim).” And do not be of those who set-up partners (for Allah)” , what is meant is the second meaning of Islam, meaning that the Prophet was commanded to be the first one amongst his people to believe in what was revealed to him, not to be the first person in history to surrender to Allah because all other prophets that lived before him had already surrendered to Allah and obeyed his commands.

It can be understood from verse 85 of Surah Ale Imran (Whosoever chooses a religion other than Islam, it will not be accepted from him) and verse 3 from Surah Al Ma’idah (Today I have perfected your religion and am happy with Islam as your religion) that Muslims are only those who follow the religion of the Prophet (PBUH) because by choosing Islam as their religion and believing in all previous Prophets and divine religions, they have proven their submission to Allah (SWT).

According to this definition, today people of other religions are not Muslims because they have not surrendered to Allah by accepting the new religion that was revealed to the seal of the Prophets. Therefore, nowadays only the followers of are Muslims, even though they may not act according to the teachings and rulings of Islam.